Theta Edge posts net loss RM1.49m in 1Q

KUALA LUMPUR (May 9): Theta Edge Bhd posted net loss RM1.49 million in the first quarter ended March 31, 2012 compared to net profit RM80,400 a year earlier, due to the small margins derived from the trading revenue which was insufficient to cover the group overheads.

The company said on Wednesday that its revenue for the quarter fell to RM19.37 million from RM21.24 million in 2011.

Loss per share was 1.39 sen compared to earnings per share of 1.27 sen, while net assets per share was 79 sen.

On its prospects, Theta Edge said it expects that the financial year 2012 would remain challenging.

“Barring any unforeseen circumstances, the board expects improved performance for the financial year ending 2012 as compared to financial year 2011,” it said.



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Stocks to watch: AFG, Maybank, Tradewinds Plant, KrisAssets

KUALA LUMPUR (Feb 22): With the corporate results season for the October-December in full swing until Feb 29, they will provide the leads for investors.

So far the banks and PLANTATION []s have been reporting firm set of earnings, based on the recent results, though there had been some writebacks.

Among the stocks to watch are ALLIANCE FINANCIAL GROUP BHD [] (AFG), MALAYAN BANKING BHD [], Tradewinds Plantations Bhd and TH PLANTATIONS BHD [].

Also in focus could be QL RESOURCES BHD [], KRISASSETS HOLDINGS BHD [], Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE), Malaysia Airports Holdings Bhd (MAHB), TEBRAU TEGUH BHD [] and ENG TEKNOLOGI HOLDINGS BHD [].

AFG posted net profit of RM121.29 million in the third quarter ended Dec 31, 2011, up 9% from the RM111.26 million, underpinned by growth in interest income due to the expansion in loans.

Its revenue increased by 9.2% to RM311.43 million from RM284.98 million. Earnings per share were 7.90 sen compared with 7.30 sen.

AFG said for the nine months ended Dec 31, 2011, the earnings rose 14.6% to RM371.80 million from RM324.27 million while it recorded a 9% increase in revenue of RM935.80 million from RM858.18 million.

Maybank has proposed to establish a subordinated programme of up to RM7 billion in nominal value. The net proceeds from the issuance of the subordinated notes will be utilised to fund Maybank’s working capital, general banking and other corporate purposes.

Tradewinds Plantations’ earnings increased 17.5% to RM97.75 million in the fourth quarter ended Dec 31, 2011 from RM83.33 million a year ago, boosted by an increase in its palm products production.

Its revenue soared 174% to RM804.23 million from RM293.45 million.

For the year ended Dec 31, 2011, its net profit increased 79.9% to RM335.46 million from RM186.40 million. Revenue rose 86.8% to RM1.70 billion from RM909.13 million.

TH Plantations recorded a 11.3% fall in profits to RM37.71 million in the fourth quarter ended Dec 31, 2011 from RM42.52 million a year ago, due to maintenance carried out during the quarter.

Its revenue increased by 1.99% to RM130.09 million from RM128.53 million. It proposed dividend per share of 12.50 sen.

For the year ended Dec 31, 2011, net profit increased 39.5% to RM124.83 million from RM89.48 million. Revenue rose 18.8% to RM434.86 million to RM365.97 million.

QL Resources' net profit increased by 3.8% to RM34.42 million in the fourth quarter ended Dec 31, 2011 from RM33.14 million a year ago, due to increased sales in its marine product manufacturing arm, palm oil activities and livestock farming. Its revenue increased 10.6% to RM498.96 million from RM450.95 million a year ago.

KrisAssets said the market value of its two malls -- Mid Valley Megamall and The Gardens Mall in Kuala Lumpur – have been revalued at RM3.290 billion as at Dec 31, 2011. It said this was RM470 million above the valuation as at Sept 30 of RM2.82 billion.

MMHE’s earnings fell 65.4% to RM46.35 million in the third quarter ended Dec 31, 2011 from RM134.15 million a year ago. Its revenue declined 45.6% to RM716.15 million from RM1.316 billion a year ago.

For the nine months, its earnings fell 36.1% to RM205.60 million from RM322.11 million in the previous corresponding period. Its revenue declined 39.1% to RM2.137 billion from RM3.512 billion.

MAHB’s earnings were just up 0.8% to RM122.88 million in the fourth quarter ended Dec 31, 2011 from RM121.91 million a year ago. Its revenue increased by 2% to RM837.38 million from RM820.60 million.

For the financial year ended Dec 31, 2011, its earnings rose 26.6% to RM401.11 million from RM316.78 million. Its revenue increased 11.6% to RM2.754 billion from RM2.468 billion.

Tebrau Teguh reported net losses of RM1.13 million for the fourth quarter ended Dec 31, 2011 due to higher operating expenses. It was also in the red with net loss of RM212,000 a year ago.

For FY11, it was still profitable, with net profit of RM2.58 million, down by 29% from RM3.63 million in FY10. Revenue fell 37.3% to RM113.41 million from RM180.97 million.

Eng Teknologi was in the red for the fourth quarter ended Dec 31, 2011 and for the financial year with net losses of RM51.81 million, and RM42.90 million. The manufacturer of components for hard disk drives said it wasimpacted by the severe floods in Thailand last year.



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Schools project worth RM350m?

Sistem Pengurusan Sekolah (SPS), or school management system project, which The Media Shoppe Bhd and Theta Edge Bhd are jointly proposing to the government, is estimated to be worth around RM350 million, according to a source familiar with the matter.

Theta Edge said in its reply to Bursa Malaysia’s query last Thursday that the estimated value of the project, profit margin and revenue and profit sharing ratio between the two parties are still being discussed. Similarly, The Media Shoppe told the stock exchange that the project value and profit sharing arrangement with Theta Edge have yet to be determined.

Theta Edge did indicate that if its wholly-owned subsidiary Konsortium Jaya Sdn Bhd (KJSB) is awarded the project, it would have a material impact on the group’s earnings.

In its Jan 19 announcement to Bursa Malaysia, Media Shoppe said its wholly-owned subsidiary TMS Software Sdn Bhd had entered into a teaming agreement with KJSB to submit their proposal for the SPS project to the government.

KJSB, which provides sales and maintenance of computers and telecommunications equipment, peripherals and related services, is the main contractor in this project. If it is awarded the project, it will appoint TMS as subcontractor for the implementation stage.

“The project proposed to the Ministry of Education (MoE), which will take about three years to implement in 10,000 schools, is estimated to be worth RM350 million. The expected margin is quite high,” said the source.




If the project is secured, it could give the two companies’ earnings a major lift.

Theta Edge and The Media Shoppe have a combined market capitalisation of RM244.6 million and were loss-making in the first nine months of last year.

Theta Edge has a market capitalisation of RM65.42 million. Its revenue for FY10 ended Dec 31 was RM86.2 million and its net loss RM4.3 million. For the nine months to Sept 30, 2011, the company posted a net loss of RM10.51 million on revenue of RM42.44 million.

The Media Shoppe’s market capitalisation stood at RM179.2 million. Its revenue for FY10 ended Dec 31 was RM10.2 million and its net profit RM2.2 million. For the nine months to Sept 30, 2011 though, the company slipped into the red, with a net loss of RM3.7 million on revenue totalling RM2.63 million.

The RM350 million project is apparently a milestone for both companies but it should be noted that it is not yet in the bag. It is also unclear if the government will open up the SPS project for tender by other parties.

As such, investors betting on it becoming a reality for the two companies could be taking a risky bet, especially after the sizable gains last week.

“There is currently no call for tender and the expected date of submission of proposals to the government for the project is not fixed,” The Media Shoppe clarified to the stock exchange last Thursday. “We have successfully implemented the pilot project in 88 schools and have the technical knowledge, experience, software resources and necessary expertise for the same area.”

Theta Edge, a subsidiary of Tabung Haji group, told Bursa in its reply that KJSB had only started working with TMS on the preparation of the proposal. It added that the expected financing requirements and/or sources of funding for the project and sub-contract agreement had yet to be finalised.

It also pointed out that no deposit, performance bond or tender fee had been paid for the teaming agreement with TMS, and no date was set for the submission to the MoE.

“As far as Theta Edge is aware, there is no specific time frame for the MoE to revert on the outcome of the proposal,” said the company.

The SPS is a system that manages day-to-day school operations such as student registration, subjects, extra curricular activities, examinations and staff. It also acts as a communication channel for teachers, students, parents and the MoE, according to the source.

Theta Edge outlined the roles of KJSB, which include hosting, creating and submitting the proposal and subsequent correspondence with the MoE. It will also consult with TMS on the preparation, creation, submission of the proposal and communication with the MoE.

To this end, TMS will also prepare and submit to KJSB part of the proposal with regard to its services that include its roles, responsibility and fees.

The Media Shoppe’s share price tripled in the past week alone after news of the project broke.

After Bursa issued an unusual activity query on Jan 19, the company announced the tie-up with Theta Edge on the same day, and requested a suspension of the shares on Jan 20 which closed at 34 sen.

The counter resumed trading last Friday to close at 37.5 sen, up 3.5 sen but off an intra-day high of 45 sen. Before last week’s rally, its shares were trading below 10 sen.

Theta Edge’s shares also rallied, but by a smaller margin. The stock shed 2.5 sen to 61 sen last Friday, and rose 30% from 47 sen before the market closed for the lunar new year holidays.

However, with no certainty if the proposal will be accepted by the government, and with no fixed timeline, an analyst advocates caution at this juncture.

As a yardstick, net assets per share of The Media Shoppe and Theta Edge stood at six sen and 82 sen respectively as at Sept 30, 2011.


This article appeared in The Edge Financial Daily, January 30, 2012.



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KLCI rises at mid-morning, lower liners in focus at Bursa

KUALA LUMPUR (Jan 26): Lower liners were in focus at Bursa Malaysia Securities Bhd at mid-morning on Thursday as the FBM KLCI edged up, lifted by select blue chips.

At 10am, the FBM KLCI added 0.92 of a point to 1,520.68.

Gainers led losers by 230 to 141, while 221 counters traded unchanged. Volume was 368.82 million shares valued at RM208.71 million.

At the regional markets, Hong Kong’s Hang Seng Index rose 1.02% to 20,314.70, South Korea’s Kospi gained 0.20% to 1,956.12, Singapore’s Straits Times Index edged up 0.20% to 2,897.28 and Japan’s Nikkei 225 shed 0.03% to 8,881.30.

The China and Taiwan stock markets are closed for the Chinese New Year holidays.

BIMB Securities Research in a note Thursday said the lack of new developments in Europe coupled with the highly anticipated low rate regime as pledged by the Feds, acted as catalysts for Wall Street pushing the Dow Jones Industrial Average up 81 points to close at a high of 12,757.

However, the same cannot be said for major European bourses as most ended up in the red as Greece remained locked in a negotiation stalemate on its debt restructuring, it said.

Meanwhile, performance from regional markets were rather mixed yesterday possibly from the holiday mood that most were still enjoying with Hong Kong and Taiwan remaining closed for Chinese New Year celebrations, it said.

The research house said that on the domestic front, the FBM KLCI saw some profit taking on blue chips as reflected by the 3 point decline to a tad below the 1,520 mark.

“Nonetheless, retailers came out in droves as trading on penny stocks came alive on the 1st trading day in the Year of the Dragon.

“We expect the benchmark index to move within a tight range of between the 1,515 and 1,525 levels and envisage focus to be on the lower liners again,” it said.

On Bursa Malaysia this morning, Boxpak added 18 sen to RM2.35. Theta 11.5 sen to 64.5 sen, YTL Cement, DRB-Hicom and WCT gained 11 sen each to RM4.47, RM2.41 and RM2.45, Carlsberg, Jaya Tiasa, Hartalega and Nestle added 10 sen each to RM8.78, RM7.13, RM6.70 and RM56.20 respectively, while GCE added nine sen to 75 sen.

DBE Gurney was the most actively traded counter with 27.5 million shares done. The stock added half a sen to 13 sen.

Other actives included Wijaya, DRB-Hicom, Unisem, Denko, KHSB, JCY and Iris Corp.

Decliners included Malayan Flour Mills, Hibiscus, DKSH, Can-One, Bursa Malaysia, Perduren, Chin Well, Kian Joo and MSM.



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KLCI stays firmly above 1,510-level at mid-day

KUALA LUMPUR (Dec 30): The FBM KLCI stayed firmly above the 1,510-point level at the mid-day break on Friday, as global markets mostly pushed towards ending the year on a positive note.

At the mid-day break, the FBM KLCI rose 7.23 points to 1,513.92.

Gainers led losers by 337 to 254, while 333 counters traded unchanged. Volume was 572.05 million shares valued at RM483.97 million.

The ringgit strengthened 0.02pct to 3.1772 versus the US dollar; crude palm oil futures for the third month delivery gained RM13 per tonne to RM3,168, crude oil was up 12 cents to US$99.77 while gold added US$8.28 an ounce to US$1,554.25.

Meanwhile, Asian stocks nudged higher and the euro clung to overnight gains on Friday, the last trading day of 2011, as positive data from the United States helped allay concerns on the global economy, while year-end short covering lifted crude prices, according to Reuters.

Still, the region's stocks have collectively lost about a fifth of their value this year, as natural calamities and financial turmoil took a toll on the risk appetite of investors, driving them to safer assets such as the US dollar and gold.

At the regional markets, Japan’s Nikkei 225 rose 0.42% to 8,434.55, Hong Kong’s Hang Seng Index gained 0.41% to 18,472.76, the Shanghai Composite Index was up 0.82% to 2,191.46, while Singapore’s Straits Times Index fell 0.25% to 2,666.17 and Taiwan’s Taiex shed 0.09% to 7,068.56.

On Bursa Malaysia, gainers were led by BAT that rose 28 sen to RM49.88, Lipo Corp 14.5 sen to RM1.13, IJM Corp 13 sen to RM5.67, Faber and IOI Corp 12 sen each to RM1.74 and RM5.40, Milux 11 sen to RM1.26, LPI Capital up 10 sen to RM13.60, while Aeon and AIRB added nine sen each to RM7.30 and RM1.65.

Among the decliners, Nestle fell 50 sen to RM55.50, SHH 15 sen to 25 sen, Sunchirin nine sen to RM1.36, Hunza PROPERTIES [], Theta and DKSH lost seven sen each to RM1.42, 50 sen and RM1.58 respectively.

Mulpha was the most actively traded counter with 32.66 million shares done. The stock added one sen to 39.5 sen.

Other actives included Utopia, Sanichi, TMS, Cybertowers and LFE Corp.



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