Stocks to watch: Plantations, Supercomnet, TDM, Poh Kong

KUALA LUMPUR (March 27) : PLANTATION [] stocks could be a highlight for Malaysian stocks on Wednesday as investors weigh the effects of pre-election sentiment in the country against world economic growth concerns.

Malaysian crude palm oil (CPO) futures rose to a fresh high of RM3,485 a tonne on Tuesday in anticipation of declining oil palm output against higher demand for the commodity.

As plantation firms make up about a fifth of the FBM KLCI’s weightage, improving sentiments on CPO prices could give a lift to the stock market gauge.

However, analysts said “shrinking volume and cautious sentiment” in the stock market ahead of the country’s general election may curb the FBM KLCI’s advance.

The FBM KLCI of 30 stocks rose 5.12 points to close at 1,588.1 on Tuesday.

Stocks to watch on Wednesday include plantation stocks, Supercomnet Technologies Bhd, TDM BHD [] and POH KONG HOLDINGS BHD []. Other counters which could see trading interest are UMW HOLDINGS BHD [], STAR PUBLICATIONS (M) BHD [] and CAHYA MATA SARAWAK BHD [] (CMSB).

Supercomnet Technologies Bhd, whose share price fell on Tuesday after surging on Monday, stated Mohd Nazifuddin Mohd Najib was not taking up the option to purchase an 18.66% stake in the company.

TDM Bhd has proposed a final dividend of 18.5 sen per share, tax exempt for the financial year ended Dec 31, 2011.

Poh Kong, a jeweller, said its net profit rose 31% to RM12.43 million in the second quarter ended Jan 31, 2012 from RM9.52 million a year earlier as the jeweller raked in higher sales against the backdrop of rising gold prices.

RHB Research Institute has revised upwards its earnings forecast for UMW by between 0.8% and 1% for financial years ending Dec 31, 2012 to 2014, besides raising its target price for the stock from RM6.70 to RM7.30.

Star Publications’ shares will go ex-dividend on Wednesday. The company dad declared a second interim dividend of nine sen a share for financial year ended Dec 31, 2011.

CMSB and Rio Tinto plc have called off plans to jointly establish an aluminium smelter in Sarawak as electricity-supply details for the project could not be finalised.



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Poh Kong 2Q profit up 31% on-year

KUALA LUMPUR (March 27) : POH KONG HOLDINGS BHD []’s net profit rose 31% to RM12.43 million in the second quarter ended Jan 31, 2012 from RM9.52 million a year earlier as the jeweller raked in higher sales against the backdrop of rising gold prices.

In a statement to the exchange on Tuesday, Poh Kong said its revenue climbed 19% to RM202.41 million from RM170.48 million previously. Cumulative first half net profit rose 48% to RM30.15 million from RM20.41 million a year earlier as revenue increased 27% to RM433.06 million from RM339.94 million

“For the current financial year, the group will continue its drive to build market share by enhancing and differentiating its product offerings to its targeted market segments.

“Towards this purpose, the group is actively evaluating various initiatives and opportunities to attract new customers through the introduction of new product designs and enhanced customer service,” Poh Kong said.

Shares of Poh Kong climbed one sen to close at 55.5 sen.



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Stocks to watch Subur Tiasa, Amway, Poh Kong, Genetec , Perak Corp, Kein Hing

KUALA LUMPUR (March 24): The FBM KLCI is expected to trend higher in the weekbegining March 26, supported by local market defensiveness election hyped trading sentiment and bullish quartr-end window dressing.

World stocks rebounded on Friday, lifted by shares in energy and basic materials, as concerns about global growth were set aside by investors who saw further gains in this year's rally, according to Reuters.

Meanwhil, US stocks rose in light volume on Friday, boosted by rising energy and basic materials shares, and the S&P 500 continued to show resilience even as it posted its second negative week so far this year, it said.

Affin Investment Bank vice president and head of retail research Dr Nazri Khan said that despite the global weakness on negative manufacturing data from China, French and Germany, he expects the FBMKLCI to trend moderately higher next week, supported by local market defensiveness; election hyped trading sentiment and bullish quarter-end window dressing.

“We note that although most global indices trended lower late last week, the local benchmark closed higher and managed to stay resilient (KLCI up 0.6%, FTSE All World down 0.8% w-o-w) despite negative ideas of China economic contraction and rising recession concerns in the Europe.

“We believe such ideas are not new as market may have factored in eurozone recession and China slow down since late last year,” he said.

Nazri said that the overall feel was that the global market had rallied a long way and was now overbought –he said the FTSE All-World index sits less than 2% below last week’s near eight-month peak, when it had surged almost 13% year to date – hence it needs a breather to neutralize its overboughtness as well as new positive catalysts to propel it higher.

He said cheap liquidity would be the biggest catalyst in the near term, including Ben Bernanke‘s Fed promises to keep interest rates low until 2014 and the ECB decision to lend over $1 trillion (at 1% rates for a three year duration) to under-capitalized European banks will be the primary cushion for the market against unexpected distribution.

“Despite rising inflation risk due to higher oil price, there are rumours that several central banks such as Bank Of England, Swiss National Bank and Bank of Canada and even Bank Of India to play catch up with Fed and ECB (in pumping liquidity) which we think will be supportive for the local market,” he said.

As for the local front, we expect the quarterly portfolio rebalancing as the most important bullish drivers with a combination of premium investors, high end retail and institutional making large bets ahead of the anticipated stronger second half (which include the upcoming mega IPO such as Felda and anticipated election in the second quarter).

The fact that the local benchmark index has already inched up 3% year-to-date and 18% since the September 2011 low is a testimony of the local market defensiveness (in terms of shallower correction, low beta due to slim MSCI weightage, low foreign shareholding and resilient domestic earning driver) especially during global volatility.

“Further, we see most regional bourses have successfully breached the pre-Lehman crisis’ high (Jakarta Composite Index, Philippines Composite Index and Thailand SET Index at three year high) which in turn can be supportive momentum for FBM KLCI.

“On the technical front, momentum studies continue to trend higher despite entering overbought levels, suggesting more positive bias. Uptrend so far remains intact with FBMKLCI still holding above the 20, 50 and 200 moving average near 1,580-1,565 support level. The next area of resistance are pegged at 1,590 and 1,600 while support should come at 1,580 and 1,565 levels,” he said.

Among the stocks that could be in focus are SUBUR TIASA HOLDINGS BHD [], AMWAY (M) HOLDINGS BHD [], POH KONG HOLDINGS BHD [], Genetec TECHNOLOGY [] Bhd, Perak Corp Bhd, KEIN HING INTERNATIONAL BHD [].

Subur Tiasa’s earnings rose 10.5% to RM6 million in the second quarter ended Jan 31, 2012 from RM5.43 million a year ago, boosted by the stronger manufacturing sector.

Kenanga Investment Bank Bhd has initiated coverage on Amway with an “outperform” call and target price of RM10.94.

Poh Kong said the jeweler has fully settled its outstanding debt under a RM200 million Islamic bond scheme. The stock was down 0.5 sen to 56 sen.

Genetec, a contract manufacturer of industrial equipment, has secured RM27.9 million worth of jobs, of which, orders from the hard disk drive sector account for 90% or RM25 million of the total amount.

Meanwhile, Perak Corp is collaborating with Sanderson Project Development (M) Sdn Bhd to develop and operate an animation theme park in Ipoh. The project includes hotel and high-rise residential portions. Shares of Perak Corp fell one sen to RM1.39 on Friday.

Finally, industrial component assembler Kein Hing reported a net loss of RM292,000 in the third quarter ended Jan 31, 2012 from a net profit of RM1.55 million a year earlier as revenue was down 8% to RM37.99 million. Kein Hing closed unchanged at 51 sen last Friday.



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Poh Kong bullish on its 2012 performance

Poh Kong Holdings Bhd (PKHB), Malaysia's largest jewellery chain store, hopes to sustain its sterling performance this year with the opening of between three and five outlets, supported by the strong demand for gold bullion and jewellery.

Executive Chairman and Group Managing Director Datuk Eddie Choon Yee Seiong said the board of directors remained positive of the group's performance and hoped to achieve better results this year.

"Moving forward, the demand for gold globally is still on the uptrend as such we were still expecting double-digit growth for gold bullion and gold bars, as a form of investment.

"So, there's still potential for us to perform better (this year)," he told reporters after the company's annual general meeting today.

He said although gold price was currently trending downwards, the outbreak of a war in Iran would actually see gold prices surging as much as 30 per cent.

"The gold price will be pretty choppy this year but if the Iran war starts, we will see gold prices surging ahead.

"War will give an advantage to this precious metal industry," he added.

Choon said demand for gold remained resilient over the long-term due to its intrinsic value, the Asian culture of giving gold as customary gifts and as a hedge against inflation and global currency risks.

"Demand for gold still remains resilient. In fact, when the price goes up, many investors go for gold bar and bullion as a form of investment," he added.

On the company's restructuring programme, Choon said:"The internal restructuring is for us to wind up some of the non-key subsidiaries and to consolidate our business to specific functions.

"Once the internal restructuring is completed, we will have PKHB as the sole propriety to manage and control the 100 retail outlets that we have today," he added.

Choon said the restructuring programme would also help the company improve its operations and efficiency and bring down the cost of maintaining subsidiaries.

"On top of the restructuring, we will also consolidate all our bank facilities. The internal restructuring will take between three and five years to complete," he said.

Updating on outlet expansion, Choon said PKHB would open its 101 outlet at Station 18, Ipoh, in March with an investment of more than RM5 million.

"We will also terminate our franchise agreement in Sabah. So far, we don't have any exposure in Sabah but we were looking to the near future to expand our business there," he said. -- Bernama



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Poh Kong to benefit from upward trend in gold price

KUALA LUMPUR (Jan 10): The high gold price on the global futures market will boost the gross profit margin of top Malaysian jeweler, POH KONG HOLDINGS BHD [].

The increase in gold futures prices would eventually be passed down to consumers, according to Poh Kong's head of corporate affairs, administration and human resources. Margaret Hon

Speaking to reporters after its AGM on Tuesday, she expected gold price to see volatile trade as the market had corrected from the high of nearly US$2,000 per oz last year while a possible war between the West and Iran would boost demand for gold.

"The gold price will look pretty choppy for this 2012, but if the Iran war is on, we would see the gold price to rise,” she said. She added at present, gold price was on a downward trend but she expected prices to pick up.

Poh Kong managing director and executive chairman Datuk Eddie Choon Yee Seiong said gold price could increase by as much as 30% this year compared to the average price seen last year.

In 2011, the average price for gold was at US$1,572.86 per oz, with the year's high and low was at US$1,900.23 per oz on Sept 5 and US$1,313.93 per oz on Jan 27.



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Poh Kong rises on Q1 income surge

Poh Kong Holdings Bhd, a Malaysian jewelry maker, climbed the most in three months in Kuala Lumpur trading after first-quarter net income jumped 62 per cent to RM17.7 million.

The stock gained 4.8 per cent to 43.5 sen at 9:10 a.m. local time, set for the steepest increase since Sept 20. -- Bloomberg



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Danajamin guarantees Poh Kong sukuk

Danajamin Nasional Bhd has announced that it is guaranteeing Poh Kong Holdings Bhd's sukuk, a RM150 million seven-year Islamic Commercial Papers/Islamic Medium Term Notes programme.

In a statement today, Danajamin said the first tranche of the programme, totalling RM50 million, was issued today and fully subscribed.

Rated AAAIS(fg), the issuance comes with a seven-year maturity.
Poh Kong, a jewellery retailer with over 90 retail outlets nationwide, will use the funds raised to refinance its existing borrowings and for future capital expenditure, including the opening of new branches.

The sukuk programme was jointly arranged by Maybank Investment Bank Bhd and RHB Investment Bank Bhd.

To date, Danajamin has provided guarantees for RM3.1 billion bond programmes from various sectors, including utilities, plantation, education and manufacturing.--Bernama



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