Ireka to finish Viet hospital job by year-end

KUALA LUMPUR: The City International Hospital managed by Ireka Corp Bhd's unit, Ireka Development Management Sdn Bhd, is slated to complete by end-2012.

"Along with economic growth, social healthcare is one of the major concerns in Vietnam.

"Given the increasing demand for quality overseas medical treatment, the park will be the first integrated healthcare development in Vietnam, which will provide a comprehensive healthcare environment from facilities, hi-tech medical equipment to professional medical staff," said President and Chief Executive Officer Lai Voon Hon in a statement today.

The hospital is the first general hospital to be completed within the "Medical City" located in Vietnam’s largest medical hub, the International Hi-Tech Healthcare Park.

The hospital, developed by Hoa Lam-Shangri-La Healthcare Ltd Liability Company, will eventually have other facilities such as laboratories, medical suites, a staff residential area, medical exhibition centre & shopping mall, service apartments, international schools and a residents’ clubhouse.

Ireka’s associate company, Aseana Properties Ltd, holds a majority stake in Hoa Lam-Shangri-La Healthcare Ltd Liability Company.

Currently, the hospital is more than 50 per cent completed, with the bulk of the brick works completed.

Plaster works, mechanical and electrical services and the selection of architectural finishes are ongoing, whilst the selection and purchase of major medical equipment for the hospital were completed recently. - Bernama



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Ireka secures RM45.8m fit-out hotel project

KUALA LUMPUR (March 22): IREKA CORPORATION BHD [] has secured a RM45.81 million contract for the fit-out works of the Aloft Hotel, KL Sentral here.

It said on Thursday the contract, awarded by Iringan Flora Sdn Bhd, was for 13 months.

Ireka said the contract was expected to contribute positively to the group’s earnings for the financial year ending March 31, 2013.



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Blue chips close slightly lower, Tenaga, MMHE weigh

KUALA LUMPUR (Jan 18): Blue chips closed slightly lower on Wednesday, weighed down by declines in heavyweights Tenaga and MMHE but the broader market was mixed, with strong trading interest in small caps and penny stocks.

At 5pm, the FBM KLCI was down 1.98 points to 1,517.38. Turnover was 1.49 billion shares valued at RM1.60 billion. There were 368 gainers, 364 losers and 359 stocks unchanged.

Among key regional markets, Japan’s Nikkei 225 rose 0.99% to 8,550.58, Hong Kong’s Hang Seng Index added 0.30% at 19,686.92 but South Korea’s Kospi shed 0.02% to 1,892.39 and Singapore’s Straits Times Index fell 0.79% to 2,793.53.

European markets were in the red as investors were worried about Greek bond talks and government debt sales, a day after economic data had raised hopes the global economy wouldn't slowdown as much as feared.

Reuters reported international creditors are set to meet the Greek government to resume the talks that broke down last week over the interest rate Greece will offer on new bonds and a plan to enforce investor losses. A deal with the private sector is vital to cash-strapped Athens if it is to avoid going bankrupt when 14.5 billion euros ($18.5 billion) of bond redemptions fall due in late March.

At Bursa Malaysia, the KLCI was trading between 1,513 and 1,519 and managed to close off its intra-day low of 1,513.

A fund manager said the markets had priced in the eurozone crisis and he expected to see more upside for the markets, albeit intermittent swings in trading conditions depending on the newsflow.

At Bursa Malaysia, he said there was some profit taking ahead of the Chinese New Year next week, especially on stocks which had run-up recently. He expected the market to hold steady at the current levels.

Among the heavyweights, Tenaga fell 13 sen to RM6.10 after reporting net losses in the first quarter ended Nov 30, 2011. MMHE shed 12 sen to RM5.32 on concerns about the uncertainties about its projects and delays.

Petronas Dagangan and Petronas Gas fell 10 sen each to RM17.40 and RM15.28.

EUPE was the top loser, down 14.5 sen to 48.5 sen, Ibraco 14 sen lower at RM1.30 and Ireka 12.5 sen to 66.5 sen in thin trade.

Poultry stock DBE was the most active with 138.96 million shares done, adding two sen to 11 sen while its warrants rose 1.5 sen to 6.5 sen.

BIMB, seen as the only Syriah-compliant banking stock, jumped 22 sen to RM2.24 in heavy trade with 10.21 million units done. BIMB-CB added 1.5 sen to 9.0 sen and BIMB-CC six sen to 17.5 sen. The two warrants accounted for 100 million units transacted.



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KLCI pares down losses at mid-day

KUALA LUMPUR (Jan 18): The FBM KLCI pared down some of its losses at the mid-day break on Wednesday as key regional markets steadied on favourable economic data from China a day earlier.

However, cautioned reigned as focus returned to Europe with Portugal testing investor confidence in a debt sale and Greece resuming talks on its debt restructuring.

The FBM KLCI shed 0.14 of a point to 1,519.22 at the mid-day break on Wednesday. It had earlier fallen to its intra-morning low of 1,514.39.

Gainers trailed losers by 288 to 316, while 316 counters traded unchanged. Volume was 733.89 million shares valued at RM584.19 million.

The ringgit strengthened 0.25% to 3,1175 versus the US dollar; crude palm oil futures for the third month delivery fell RM8 per tonne to RM3,156, crude oil added 62 cents per barrel to US$101.33 while gold gained US$1.97 an ounce to US$1,654.02.

At the regional markets, Japan’s Nikkei 225 rose 1.42% to 8,586.73, Hong Kong’s Hang Seng Index gained 0.30% to 19,685.80, South Korea’s Kospi was up 0.29% to 1,898.18, Taiwan’s Taiex rose 0.20% to 7,235.27 and Singapore’s Straits Times Index gained 0.19% to 2,821.27.

Meanwhile, the Shanghai Composite Index fell 0.33% to 2,290.81.

On Bursa Malaysia, Eupe fell 14.5 sen to 48.5 sen, Ibraco and MMHE lost 14 sen each to RM1.30 and RM5.30, Ireka lost 13 sen to 66 sen, Petronas Gas 12 sen to RM15.26, Tenaga 11 sen to RM6.12, Metrod 10 sen to RM2, Perduren down 7.5 sen to 75 sen, while Fututec and Maybank fell seven sen each to 72 sen and RM8.22.

Among the gainers, GAB added 40 sen to RM12.20, KLK 24 sen to RM24.88, Far East 20 sen to RM7.20, MPHB 14 sen to RM2.86, Sungei Bagan and Petronas Chemicals up 12 sen each to RM2.94 and RM6.63, Degem 10.5 sen to RM1.05, while Batu Kawan and BAT added 10 sen each to RM18.66 and RM49.90.

DBE Gurney was the most actively traded counter with 70.3 million shares done. The stock gained one sen to 10 sen.

Other actives included Compugates, Wijaya, XDL, E&O, BIMB and MPHB.



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KLCI tapers down at mid-morning on mild profit taking

KUALA LUMPUR (Jan 18): The FBM KLCI slipped into negative territory at mid-morning on Wednesday on mild profit taking as investors began squaring off positions ahead of the extended weekend to celebrate the Chinese New Year next week.

At 10am, the FBM KLCI fell 2.19 points to 1,517.17, weighed by select blue chips.

Gainers edged losers by 209 to 185, while 229 counters traded unchanged. Volume was 361.96 million shares valued at RM185.82 million.

Asian shares and the euro steadied on Wednesday after sentiment improved on soothing economic data the day before, as focus returns to Europe with Portugal testing investor confidence in a debt sale and Greece resumes talks on its debt restructuring, according to Reuters.

European equities hit their highest in more than five months while gains in U.S. stocks were pared on Tuesday after Citigroup Inc reported an 11 percent drop in quarterly profit, as the European crisis battered capital markets and hurt the bank's trading revenue and fee-generating deals, it said.

At the regional markets, Japan’s Nikkei 225 rose 0.11% to 8,476.12, Hong Kong’s Hang Seng Index added 0.14% to 19,654.70, the Shanghai Composite Index was up 0.17% to 2,302.31 and Taiwan’s Taiex gained 0.24% to 7,238.25.

Meanwhile, South Korea’s Kospi fell 0.22% to 1,888.53 and Singapore’s Straits Times Index shed 0.19% to 2,810.36.

BIMB Securities Research in note Jan 18 said that investors’ risk appetite had expanded, adding that despite the looming Greece debt default and the recent downgrade of some European credit ratings, equity markets both in the US and Europe advanced buoyed by positive economic news.

Unlike previously, the positives now carry higher multiplier effects than the negatives, it said.

Reflecting the improved sentiments, yields of Italy, Germany and Spain had all declined, it said.

The research house said most European bourses closed higher overnight with the Dow Jones Industrial Average upped 60 points despite off its intra-day high.

Regional performances were also on a high with most ended the day on positive tone possibly from improved opening over in Europe, it said.

“Locally, the FBM KLCI rose 10 points yesterday to close above its immediate resistance of 1,515 at 1,519.36.

“We reckon there are funds out there snapping at equities on weakness and see the index to remain resilient. We may see the next immediate resistance of 1,525 level breached today,” it said.

On Bursa Malaysia, Petronas Dagangan was the top loser at mid-morning and fell 34 sen to RM17.16; Ireka and Eupe fell 13 sen each to 66 sen and 50 sen, Tenaga down 12 sen to RM6.11, Malayan Flour Mills and Maybank nine sen each to RM7.68 and RM8.20, United PLANTATION []s and PPB six sen each to RM20 and RM16.94, while Sapura Industrial and Delloyd fell five sen each to RM1.40 and RM3.38.

DBE Gurney was the most actively trade counter with 49.3 million shares done. The stock gained one sen to 10 sen.

Other actives included XDL, E&O, BIMB, Compugates, Mudajaya and Maybulk.

Gainers at mid-morning included BAT, Sungei Bagan, Batu Kawan, HLFG, Carlsberg, Parkson, Genting, CCM and Mudajaya.



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China data lifts Asian markets, KLCI stages firm rebound

KUALA LUMPUR (Jan 17): The FBM KLCI staged a firm rebound on Tuesday as Asian markets mostly rose after data suggested the world's second-largest economy grew faster than expected in the last quarter of 2011 with a year-on-year growth of 8.9%.

The FBM KLCI rose 10.30 points to close at 1,519.36, lifted by select blue chips.

Gainers led losers by 433 to 330, while 305 counters traded unchanged. Volume was 1.44 billion shares valued at RM1.79 billion.

At the regional markets, the Shanghai Composite Index jumped 4.18% to 2,298.38, Hong Kong’s Hang Seng Index rose 3.24% to 19,627.75, South Korea’s Kospi was up 1.8% to 1,892.74, Taiwan’s Taiex added 1.65% to 7,221.08, Japan’s Nikkei 225 gained 1.05% to 8,466.40 and Singapore’s Straits Times Index gained 2.2% to 2,815.85.

On Bursa Malaysia, BAT was the top gainer and added 50 sen to RM49.80; Genting rose 44 sen to RM11, Dutch Lady 40 sen to RM25.90, Petronas Dagangan 28 sen to RM17.50, KLK 26 sen to RM24.64, Ibraco 21 sen to RM1.44, Ireka 18 sen to 79 sen and Genting PLANTATION []s 16 sen to RM9.10.

Proton was the most actively traded counter after Khazanah Nasional Bhd finally put an end to months of speculation and announced it was divesting its 42.72% Proton stake to DRB-HICOM BHD [] 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.

Proton rose 23 sen to RM5.41 with 57.5 million shares done. Meanwhile, DRB-Hicom fell seven sen to RM2.10.

Other actives included Maybulk, Compugates, E&O, RedTone, CIMB and DRB-Hicom.

Losers included Tradewinds, GUH, Fiamma, PacificMas seven sen to RM3.48, while Kawan Food and Lysaght lost six sen each to 87 sen and RM1.64.



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Ireka: Unexciting earnings but good yields

Ireka Corp Bhd’s results for 2QFY12 were within our expectations on an annualised basis, as our forecasts were conservative to begin with.

However, earnings were substantially lower than 1QFY12 due to lower contributions from London-listed associate Aseana Properties Ltd (ASPL), as well as RM5 million in provisions for liquidated and ascertained damages arising from late delivery of Seni Mont’Kiara.

For 2QFY12, Ireka turned in a net profit of RM1.1 million on a revenue of RM112.7 million. This was a marked improvement over the net loss of RM87,000 posted a year ago, which was also hit by one-off provisions, but a substantial decline from a net profit of RM7.5 million in 1QFY12.

The first quarter saw contributions of RM7 million from ASPL, following the completion of Phase 1 of Seni Mont’Kiara. ASPL recognises profits according to IFRIC 15 (International Financial Reporting Interpretations Committee 15), where profits are recognised on full completion of the project, rather than on a progressive completion basis.

Contributions from associates declined to RM621,000 in 2Q. For the first half of FY12, Ireka posted pre-tax profit of RM9.4 million compared with a loss of RM2.9 million a year earlier. Net profit came in at RM8.6 million from a loss of RM3.1 million, while revenue was relatively flat, rising 1% to RM211.7 million.

Excluding the RM5 million provision, Ireka’s construction division would have fared better, with six-month estimated pre-tax profit of RM7.2 million compared with RM5.9 million a year ago, with roughly flat revenue of RM198.7 million.

Concerns over sustainability of ASPL rebound, Vietnam
We are raising our net profit forecast for FY12 by 34% to RM13.1 million, or 11.5 sen per share. This places the stock at a forward price-earnings ratio (PER) of 6.4 times.

We also note, however, that Ireka’s earnings tend to be lumpy and volatile on a quarterly basis, and FY13 could see a dip in earnings as ASPL will not be recognising profits from the completion of projects then.

ASPL has completed the second and final phase of Seni Mont’ Kiara and obtained the certificate of fitness in October 2011. The units sold are currently being handed over to buyers. This could result in a stronger quarter ahead for Ireka and ASPL as the earnings are recognised by ASPL.

Continued concerns over the sustainability of ASPL’s turnaround after the completion of Seni Mont’Kiara, as well as Vietnam’s economy and property market woes will likely put a dampener on ASPL — and Ireka’s share price.

Still, downside risks are low with the stock trading at single digit PER, and well below its book value of RM2.01. Plus, Ireka offers consistently high dividends, with a yield of 6.8% expected this year, based on five sen per share.

The sustainability of ASPL’s turnaround is key to the re-rating of Ireka. However, ASPL will see lumpy earnings due to the adoption of IFRIC 15, which recognises profits on full completion, rather than on a progressive completion basis.

As such, the recognition of profits from both phases of Seni Mont’Kiara will boost earnings this financial year — in 1Q and 3Q. Going forward though, it will be difficult for ASPL to fill the void from Seni Mont’Kiara given its size, although it has several projects under construction in KL Sentral and Sabah.

ASPL’s current ongoing projects include Sandakan Harbour Square, KL Sentral and International Hi-Tech Healthcare Park in Ho Chi Minh City, and a planned launch of condominiums in Jalan Kia Peng, in the KLCC area, in a 70:30 joint venture between ASPL and Ireka.

Moreover, the projects in Vietnam have mostly been deferred due to the weak economic outlook there.

The slump in Vietnam’s property market since 2008 has affected sentiment for companies with exposure there, including ASPL. ASPL’s shares fell as much as 89% to US$0.11 (34.5 sen) during the crisis, from an IPO price of US$1. They have fallen over the last three months from around US$0.46 to US$0.38.

The Jalan Kia Peng project on a one-acre site will comprise condominiums of 500 to 1,500 sq ft with an earlier estimated GDV of US$79 million. Launch of the project has now been deferred to the second half of 2012 due to planning delays.

This project should boost the bottomline of both ASPL and Ireka in FY15/FY16. Ireka is also embarking on projects in Nilai and Kajang.

For Ireka’s construction arm, order book replenishment is key, but remains relatively slow. Nonetheless, its order book has been sustained at the RM400 million mark over the past three months, and it has secured three jobs worth RM400 million in the past year.


Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.


This article appeared in The Edge Financial Daily, December 2, 2011.



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Stocks to watch: MBSB, Ireka, Maybank, Chin Teck, Jerneh Asia

KUALA LUMPUR (Oct 31): The string of positive corporate news is expected to underpin market sentiment on Tuesday, Nov 1 after the FBM KLCI ended October on a strong note.

However, the overnight fall on Wall Street could rein in some of the buying appetite and investors use this opportunity to take profit. Wall Street closed its best month in 20 years on a down note on Monday as the failure of trading firm MF Global Holdings Ltd and new worries about Europe's debt crisis hammered financial shares.

The Dow Jones industrial average dropped 276.10 points, or 2.26 percent, to 11,955.01. The Standard & Poor's 500 Index fell 31.79 points, or 2.47 percent, to 1,253.30. The Nasdaq Composite Index lost 52.74 points, or 1.93 percent, to 2,684.41.

Among the stocks to watch are MALAYSIA BUILDING SOCIETY BHD [] (MBSB), IREKA CORPORATION BHD [], CHIN TECK PLANTATION []S BHD [], MALAYAN BANKING BHD [], JERNEH ASIA BHD [] and AutoV Corporation Bhd

MBSB posted a 134% increase in its earnings to RM95.08 million for the third quarter ended Sept 30, 2011 from RM40.51 million a year ago.

Its revenue increased by 72% to RM372.67 million from RM215.77 million while earnings per share were 10.88 sen compared with 5.79 sen.

Ireka’s unit has secured a RM85.14 million contract for the proposed City International Hospital project in Ho Chi Minh City, Vietnam from Hoa Lam-Shangri-La 1 Ltd Liability Company.

Chin Teck Plantations Bhd’s earnings surged 90.8% to RM21.84 million in the fourth quarter ended Aug 31, 2011 from RM11.45 million a year ago, boosted by the increase in average selling prices of fresh fruit bunches (FFB), crude palm (CPO) and palm kernel despite lower production.

Its revenue rose 31.4% to RM38.37 million from RM29.20 million a year ago while earnings per share were 23.91 sen compared with 12.53 sen.

For the financial year ended Aug 31, its earnings rose 62.1% to RM76.01 million from RM46.88 million. Revenue rose at a slower pace of 28.6% to RM143.34 million from RM111.44 million.

Malayan Banking Bhd’s PT Bank Internasional Indonesia Tbk (BII) reported consolidated net profit of Rp555 billion (RM193.04 million) for the January-September period, up 34% from Rp415 billion a year ago.

BII said “the increase was achieved on the back of solid growth across the Bank’s core businesses as well as from its overall operational improvements”.

It recorded a 22% consolidated loan growth from Rp50.8 trillion in September 2010 to Rp61.9 trillion in September 2011, underpinned by small and medium enterprises (SME) and commercial loans.

Jerneh Asia Bhd has received a notice of voluntary conditional take-over offer from Kuok Brothers Sdn Bhd to acquire the remaining 58.19% stake which it does not own for cash consideration of RM1.45 per share and 45 sen per warrant.

Kuok Brothers and the parties acting in concert directly hold 102.02 million shares or 41.81% of Jerneh Asia.

At RM1.45, this is nine sen above Monday’s close of RM1.36 while the warrants ended at 40 sen.

Automotive components manufacturer AutoV Corporation expects its turnover to increase by 60% next year with the acquisition of Proreka (M) Sdn Bhd.

Bernama reported executive chairman Bernard Kong as saying the company was also in the midst of merging with two other listed companies to form a bigger group. “Financially we will be much stronger to support our businesses. We also can support our clients better," he said.

Kong said the merger with AIC CORPORATION BHD [] and Jotech Holdings, expected to be completed "sometime in March next year", would transform the company into an integrated manufacturing group dealing in automotive as well as electronics products.

Ireka clinches RM85m Vietnam hospital project

KUALA LUMPUR (Oct 31): IREKA CORPORATION BHD []’s unit has secured a RM85.14 million contract for the proposed City International Hospital project in Ho Chi Minh City, Vietnam.

Ireka said on Monday its unit Ireka Engineering and CONSTRUCTION [] Vietnam Company Ltd was awarded the contract by Hoa Lam-Shangri-La 1 Ltd Liability Company.

“The contract period shall be 11 months with the commencement date on Nov 1, 2011 and the expected completion date on Sept 30, 2012,” it said.

Ireka said the contract involved the construction and completion of the architectural, mechanical, electrical, external and ancillaries works.

It expected the contract to contribute positively to the group’s earnings for the financial years ending March 31, 2012 and 2013.