Hovid up 7%, earnings closely watched

KUALA LUMPUR (April 19) : HOVID BHD [] shares rose as much as 7% on Thursday morning, possibly, in anticipation that the pharmaceutical products manufacturer will announce better quarterly earnings next month.

The stock climbed 1.5 sen to 23.5 sen before trading lower at 23 sen at 10.26am with some three million shares done.

Bursa Malaysia had on January 17 this year removed Hovid from the Practice Note 17 (PN17) list after the regulator granted the firm a waiver from complying with the requirement to submit a regularisation plan to the authorities.

The waiver was granted after taking into account Hovid’s financial track record and the company’s distribution of its shares in loss-making unit CAROTECH BHD []. Hovid’s net profit rose more than seven fold to RM10.76 million in the second quarter ended December 31, 2011 from RM1.47 million a year earlier.



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Hovid’s PN17 status lifted

KUALA LUMPUR: Pharmaceutical products manufacturer Hovid Bhd’s Practice Note 17 (PN17) status will be lifted effective today.

The company’s share price gained 10% or 2.5 sen to 27.5 sen yesterday, the highest since October 2009, with 17.94 million shares done.

The counter has climbed steadily from a low of 18.7 sen in October last year.

In a filing with the stock exchange, Hovid said it received a letter yesterday from Bursa Malaysia informing the company that it no longer triggered any of the PN17 criteria.

According to the filing, Bursa had taken into consideration the profitability and growth of Hovid’s pharmaceutical segment for the past seven financial years up to June 30, 2011, as well as the latest quarter ended Sept 30, 2011. It had also taken note of Hovid’s distribution of a portion of its shareholdings in Carotech Bhd via a dividend-in-specie on Dec 23, 2011.

“Bursa Securities has decided to grant Hovid a waiver from complying with paragraph 8.04(3) of the Main Market Listing Requirements, which requires a PN17 company to submit a regularisation plan to the relevant authority to regularise its condition,” it said.

For 1QFY12 ended Sept 30, Hovid posted a net profit of RM504,000 compared with a net loss of RM5.4 million previously, while revenue came in lower at RM37 million from RM42.4 million in the previous corresponding period.

Hovid incurred a net loss of RM5.6 million in FY11 ended June 30, compared with RM53.9 million the year before.


This article appeared in The Edge Financial Daily, January 17, 2012.



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HwangDBSV Research sees KLCI staging technical rebound

KUALA LUMPUR (Jan 17): Hwang DBS Vickers Research said the selling momentum across Asia could ease off on Tuesday.

It said the major factors for the more positive outlook was due to the market reactions in Europe, which were mostly up on Monday; and the lower borrowing cost seen at France’s bonds auction yesterday.

“Hence, our Malaysian bourse will likely stage a technical rebound ahead. After losing 14.0-point or 0.9% yesterday, the benchmark FBM KLCI may rise towards the support-turned-resistance level of 1,515,” it said.

HDBSVR said there were plenty of corporate developments awaiting local investors which include:

(a) DRB-Hicom taking over Proton at RM5.50 a share. With Proton’s share price already trading at a slight discount to the offer price, it remains to be seen what would be the share price implications for DRB-Hicom;

(b) a slew of contract wins by Bumi Armada (RM155 million), Sunway (RM42 million), Dayang (RM85 million), Kim Lun (RM82 million) and Heitech Padu (RM64 million); and (c) the upliftment of PN17 status for Hovid.



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Stocks to watch: Proton, DRB-Hicom, Hovid, Bumi Armada, HeiTech Padu, Kimlun

KUALA LUMPUR (Jan 17): The strong corporate newsflow would provide excitement to the markets on Tuesday, despite the cloud of uncertainties from the eurozone.

Reuters reported European stocks were slightly higher in a choppy session on Monday, with weakness in banks after a mass credit downgrade of euro zone countries offset by a rise in defensives, such as pharmaceuticals.

Late on Friday, Standard & Poor's cut the ratings of Italy, Spain, Portugal and Cyprus by two notches and France, Austria, Malta, Slovakia and Slovenia by one notch each.

At Bursa Malaysia, the FBM KLCI fell below the 1,510- level in line with the overall weaker investor sentiment at key regional markets following Standard & Poor’s cutting the sovereign credit rating of nine of the euro zone's 17 countries.

The FBM KLCI fell 14.01 points to 1,509.06 in a broadly weaker market.

Stocks which could see trading interest area PROTON HOLDINGS BHD [], DRB-HICOM BHD [], HOVID BHD [], Bumi Armada Bhd, HEITECH PADU BHD [] and Kimlun Corp Bhd.

Proton and DRB-Hicom resume trading after a one-day suspension. As expected, Khazanah Nasional Bhd announced it was divesting its 42.72% Proton stake to DRB-Hicom for RM5.50 per share or RM1.291 billion cash.

Upon completion of the sale and purchase agreement, DRB-Hicom will be obliged to undertake a mandatory general offer on the remaining Proton shares.

Bursa Malaysia Securities has lifted Hovid Bhd from the Practice Note 17 status with effect from Tuesday.

Bumi Armada Bhd’s subsidiary, Bumi Armada Navigation Sdn Bhd has secured a RM155 million contract from Petróleo Brasileiro S.A. The contract was to provide one anchor handling towing support (AHTS) vessel to Petrobras in its hydrocarbon and mining activities in the Brazilian continental shelf.

HeiTech Padu has secured a RM63.60 million contract from Bank Simpanan Nasional for the latter’s proposed core banking system.

Kimlun Corporation Bhd has landed a contract worth RM82.1 million to build two blocks of service apartment and ancillary buildings in Johor Bahru. The company said its unit Kimlun Sdn Bhd had accepted the letter of award from Ikatan Flora Sdn. Bhd, a sub-subsidiary of IJM Land Bhd for the contract.

DAYANG ENTERPRISE HOLDINGS BHD [] has received an extension of its workboat contract valued at RM85 million from Nautika Sdn Bhd.



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Hovid to be uplifted from PN17 status on Tuesday

KUALA LUMPUR (Jan 16): Bursa Malaysia Securities has lifted HOVID BHD [] from the Practice Note 17 status with effect from Tuesday.

It said on Monday that Bursa Malaysia Securities Bhd had considered the profitability and growth of the Hovid group’s pharmaceutical segment for the past seven financial years up to June 30, 2011 as well as the latest financial quarter for the period ended Sept 30, 2011.

Bursa Securities had also taken into account that Hovid had completed the distribution of a portion of its shareholdings in CAROTECH BHD [] via dividend in specie on Dec 23, 2011. Another factor was that Hovid no longer triggered any of the criteria of PN17.

After considering the factors, Bursa Securities decided to grant Hovid a waiver from complying with paragraph 8.04(3) of the Main Market Listing Requirements which required a PN17 company to submit a regularisation plan to the relevant authority to regularise its condition.

“With the waiver being granted, Bursa Securities has informed that the company will be uplifted from its PN17 status effective from 9am on Jan 17, 2012,” it said.



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CIMB Research has technical sell on Hovid at 24.5 sen

KUALA LUMPUR (Jan 9): CIMB Equities Research has a technical sell on HOVID BHD [] at 24.5 sen at which it is trading at a price-to-book value of 1.9 times.

It said on Monday Hovid is trading at the upper band of its trading range. The resistance trend line is a level of significance and traders should not underestimate the strength of the bears.

“Technical landscape is deteriorating. MACD has staged a dead cross while RSI is dwindling towards the 50 level.

“Use any rebound towards 25 sen to 26 sen to unload on strength. Once the 30-day SMA is breached, expect prices to fall towards 23 sen and 21.5 sen. Prices need to climb above 27 sen to negate this bearish view,” it said.



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