Frasers Hospitality to manage First Hotel Residence

KUALA LUMPUR (May 9): UOA Development Bhd has engaged Frasers Hospitality Pte Ltd to manage ten premium floors of its 34-storey Camellia Services Suites in Bangsar South.

The 34-storey development in Bangsar South, UOA's flagship mixed use development, will comprise 720 units with an estimated gross development value of RM500 million and is due to be completed by mid-2013.

In a statement Wednesday, UOA Development chief operating officer David Khor said the collaboration was a testament to its strong relationship with Frasers that was built upon mutual trust and admiration for our respective business practices and company cultures.

“It also serves as an ideal platform for both companies to work in synergy by leveraging on each other’s strong brand reputation and expertise to meet the increasing demand for quality hotel residences,” he said.

UOA Development said the ten premium floors comprising 240 units including two exclusive rooftop levels equipped for recreational and business activities would be managed by Frasers under a boutique hotel residence concept, Capri by Fraser.

A key feature of the hotel residence is its creative high-tech chilled out vibe, which will be reflected with its iPad activated check-ins that do away with formal paperwork and interactive e-concierge services to coordinate every aspect of the guest’s stay, from dinner reservations, spa treatments to transport arrangements, it said.

"The opening of the first Capri by Fraser in Malaysia is significant, not only because it further extends our presence in the country but also marks the launch of an exciting new hotel residence concept by Frasers, which reaffirms our confidence in the country’s strong growth potential,” added Fraser chief executive officer Choe Peng Sum.

“With an estimated 2.9 million business travellers projected to enter the country who will contribute US$1.2 billion (RM3.68 billion) in incremental Gross National Income (GNI) 1 by 2020, Malaysia is focused on becoming one of the top five meeting destinations in the Asia Pacific. We are confident that, with our partnership with UOA, we are well positioned to meet the anticipated burgeoning demand for good quality extended stay accommodation,” Choe added.



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MIDF Research maintains Neutral on UOA Development, TP RM1.57

KUALA LUMPUR (April 23): MIDF Research has maintained its Neutral rating UOA Development Bhd with an unchanged target price of RM1.57 after the company said it was disposing its investment PROPERTIES [] in Bangsar South.

UOA development (UOA) has offered to sell a 14-storey office building at Bangsar South to DKLS Industries Berhad at a total consideration of RM93.8 milion.

The 14 storey building is currently vacant and is part of The Horizon Phase 2, Bangsar South development.

“Valuation: We have made a slight adjustment to our forecast for FY12 and FY13 due to the one off disposal gain.

“Nevertheless, we are maintaining our NEUTRAL recommendation for UOA with target price of RM1.57. The one off gain will not affect our target price as we are ascribing PER of 7X against FY12 normalised EPS of 22.4sen.” said MIDF Research on Monday.



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UOA to sell office tower to DKLS for RM94m

KUALA LUMPUR (April 20): UOA Development Bhd, a property developer and builder, plans to sell its 14-storey office tower in Bangsar to DKLS INDUSTRIES BHD [] for RM93.8 million.

In a statement to the exchange on Friday, UOA said the disposal allows the firm to unlock the value of the property located along Jalan Kerinchi here. Proceeds from the sale will finance the company's working capital needs, it said.

The selling price translates into 1.4 times the book value of RM68 million for the commercial real estate, UOA said. The seller said it expects to register an estimated disposal gain of RM19.97 million from the sale.



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CIMB Research maintains Trading Buy on UOA Development Bhd, target price RM1.84

KUALA LUMPUR (April 6): CIMB Research has maintained its Trading Buy recommendation on UOA Development Bhd at RM1.4 with a target price of RM1.84, and said its visit and showroom tour of the company reaffirmed its positive view on UOA Development.

The research in a note Friay said UOA Development’s 1Q new sales of over RM300 million put the company firmly on the path to meet, if not exceed, its full-year target of RM1 billion.

Due to the depressed share price, UOA Dev’s valuations are among the cheapest in our property coverage.

“Its P/Es are the lowest while its dividend yields are the highest. We maintain our Trading Buy call and target basis of 30% discount to RNAV,” it said.



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CIMB Research retains trading buy on UOA Development, TP RM1.84

KUALA LUMPUR (Feb 24): CIMB Equities Research said it was retaining its Trading Buy call for UOA Developments Bhd and target basis at RM1.84, which was a 30% discount to its RM2.62 RNAV.

“We are tweaking EPS while hiking up DPS due to the generous payout. Net dividend yield of 7-8% is the highest while P/E is the lowest in our property coverage,” it said on Friday.

CIMB Research said although full-year core net profit missed its forecast by 13%, however, 2011 can still be considered one of UOA Development’s best ever as it achieved record core earnings and new sales.

“The 2011’s RM848 million new sales figure is the group’s highest ever and 2012 should be even better,” it said.

The research house said it was tweaking EPS while hiking up DPS due to the generous payout.

“Net dividend yield of 7%-8% is the highest while P/E is the lowest in our property coverage,” it said.



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EPF sells 3.54m UOA Devt shares

KUALA LUMPUR (Jan 4): The Employees Provident Fund (EPF) disposed of 3.534 million shares of UOA Development Bhd on Dec 29.

A filing with Bursa Malaysia on Wednesday showed that after the disposal, the EPF’s shareholding was reduced to 59.95 million shares or 5.01%.

The share price closed at RM1.37 on Dec 29.

Listed in May 2011, the current share price of RM1.37 is RM1.15 below its final retail price of RM2.52. The institutional price was fixed at RM2.60.



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UOA Devt’s 56,000 shares crossed at RM1.50

KUALA LUMPUR (Dec 28): UOA Development Bhd saw 56,000 of its shares crossed at RM1.50 apiece on Wednesday, stock market data showed.

At RM1.50, it was 14 sen above the market price of RM1.36.

Shares of UOA Development were unchanged at RM1.36 at 3.52pm. There were 1.08 million shares transacted at prices ranging from RM1.35 to RM1.37.

In the morning session, there were 14.45 million shares crossed at an average price of RM1.36. The stake represented 1.2% of its paid-up share capital of 1.195 billion shares.



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UOA Devt sees 14.45m shares done off-market

KUALA LUMPUR (Dec 28): UOA Development Bhd saw 14.45 million of its shares crossed in an off-market deal on Wednesday at an average price of RM1.36.

Stock market data showed the stake represented 1.2% of its paid-up share capital of 1.195 billion shares.

UOA Development share price ended the morning session unchanged at RM1.36. There were 258,000 shares done at prices ranging from RM1.36 to RM1.37.



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CIMB Research has technical Buy on UOA Devt

KUALA LUMPUR (Nov 15): CIMB Equities Research has a technical buy on UOA Development at RM1.58 at which it is trading at a FY12 price-to-earnings of 6.3 times and price-to-book value of 1.2 times.

It said on Tuesday that UOA Development broke out of its bullish wedge pattern on Monday.

“We think this is a prelude to more upside ahead. If we are right, the next run-up should push prices closer towards RM1.67 and RM1.74,” it said.

CIMB Research said the MACD was still hovering in the positive territory, suggesting that the odds still favour the bulls. Meanwhile, RSI is also above the 50pts mark.

“Traders with higher risk appetite may start to nibble now. However, it is crucial to put a stop at below the RM1.52 level,” it said.



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KL bourse expected to show upside resilience

Lower liner property counters like Hua Yang, Mah Sing and UOA Development should enjoy gains in the immediate term, given their strong upside bias, says a head of research

Shares on Bursa Malaysia climbed last week, lifting the blue-chip benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) to a two-month high on external strength following better-than-expected economic data and positive outcome from the EU finance ministers' summit on October 26.

The expansion of the euro-zone bailout fund to €1 trillion, agreement by bondholders to take a 50 per cent haircut on Greek debt and robust US economic growth collectively boosted global equities, due to relief over the decisive action taken by EU leaders to prevent a debt contagion.

Subsequently, the FBM KLCI surged 42.99 points, or 3 per cent to end the week at 1,481.82, with Genting Bhd (+85 sen), Tenaga (+40 sen), Sime Darby (+35 sen), CIMB (+27sen) and Petronas Chemical (+40 sen) contributing to 60 per cent of the index's rise.

The average daily traded volume and value increased marginally to 1.486 billion shares and RM1.77 billion respectively, compared with the 1.478 billion shares and RM1.32 billion average the previous week, as trading momentum focused on lower liner penny stocks while blue chips showed slowdown in buying interest.

Agreement on affirmative actions to resolve the euro debt crisis and the fact that the US gross domesticproduct (GDP) grew at a stronger 2.5 per cent annual rate in the third quarter compared to a mild 1.3 per cent expansion a quarter earlier allayed concerns about a double dip the US and raised appetite for risky assets last week.

Raising the bailout amount to €1 billion will provide more clout to deal with the recapitalisation of European banks while the 50 per cent haircut will provide Greece more breathing space to manoeuvre itself out from under the debt crisis.

Nevertheless, it is yet to be seen how these eurozone countries will contribute to the bailout fund without affecting their credit ratings with countries like Italy forced to pay a higher interest (indicating rising default risk) in a recent bond auction that underperformed expectations.

This is an important week as more details on the Euro bailout measures are expected to emerge after the meeting of Group 20 leaders in Cannes, France this Thursday and Friday.

There are also expectations that the US Federal Reserve will reveal more hints about the third quantitative easing when it meets over the next two days. It is unlikely for the central bank to launch a third quantitative easing (QE) in the immediate term with unwavering recent economic data and the absence of deflationary pressure.

The ISM manufacturing, factory orders, non-farm payrolls and unemployment data that will be released this week could shed more clues on US Fed's next action in coming months.

On the home front, the index, in the absence of any negative news externally, may continue to chalk some gains early this week albeit at a slower pace before consolidation sets in later as short-term technical indicators have turned increasingly overbought. Rotational plays into lower liners are expected to continue with many small cap plays in the construction, property, consumer and oil & gas sectors trading at attractive valuations.

Oil & Gas sector deserves a special mention with Petronas indicating 22 marginal fields are available for development and it is giving free hands to interested oil & gas players to submit proposals by 1Q2012 before awarding them in the next three months.

The merger between SapuraCrest and Kencana place them in a stronger footing to bid for more contracts in the future and undoubtedly both these stocks are trading at undemanding valuations. Petronas' admission would lead to more M&A activities in the sector where smaller players, which are trading at a single digit forward price-to-earnings ratio, will be forced to consolidate and improve their competitiveness.

Technical outlook
Spot month October KLCI futures contract traded on Bursa Malaysia Derivatives Berhad was up a huge 47.5 points week-on-week to 1,476.5, reducing to a 5.32-point discount to the cash index, compared to the large 9.83-point discount the previous Friday.

The local stock market climbed on Monday, copying regional strength on stronger-than-expected economic data from China and Japan and after European leaders moved closer to overhaul the region's sovereign debt crisis.

The key index gained 11.19 points to settle at 1,450.02, off an opening low of 1,449.10 and early high of 1,462.06. Stocks fell into profit-taking congestion mode the next day as investors stayed sidelined ahead of the Deepavali holiday break and await the conclusion of the EU finance ministers' summit on October 26.

Still, the FBM KLCI ended up 7.78 points at the day's high of 1,457.8 due to late spurts on select index heavyweights, and off a low of 1,448.12.

The local market rose on Thursday along with strong regional gains on hopes China may soon ease monetary policy to support economic growth and on reports European leaders have agreed on writing down Greek's debt.

The index rose 13.13 points to settle at 1,470.93, off a high of 1,474.27, on robust volume totaling 1.88 billion shares worth RM2.41 billion.

The market extended gains ahead of the weekend, fueled by the strong overnight rally on US and European markets following the expansion of the euro-zone bailout fund to ?1 trillion and robust US economic growth.

The index added 10.89 points to end the week at 1,481.82, off an early high of 1,488.2 and low of 1,478.15, as gainers edged losers by 470 to 338 on strong turnover of 1.88 billion shares worth RM2.3 billion.

Trading range for the FBM KLCI was 40.08 points last week, compared with the 94.3-point range the previous week caused by the sharp intra-day dip to extreme low of 1,371, due to late programme selling from a foreign broker the previous Friday.

For the week, the FBM-EMAS Index advanced 310.41 points to 10,117.36, while the FBM-Small Cap Index climbed 318.19 points to 11,501.27, as lower liners in the construction, oil & gas and property sectors rallied to outperform the broader market.

The daily slow stochastics indicator for the FBM KLCI reissued a buy signal at the overbought zone early last week, confirming the buy signal from the oversold region on the weekly indicator.

The 14-day Relative Strength Index (RSI) indicator climbed higher to above the 60-point mark, while the 14-week RSI listed a positive reading just above 50.

Meantime, the daily Moving Average Convergence Divergence (MACD) trend indicator's signal line extended higher above the zero line to reinforce a bullish trend, while the weekly MACD signal line continued hooking up to suggest more upward momentum.

The 14-day Directional Movement Index (DMI) trend indicator will see the -DI line crossing back below the +DI line to trigger a buy signal on further strength, but the ADX line continued inching lower, confirming a trendless market.

Conclusion
Given the further improvement on momentum and trend indicators for the benchmark index, the local stock market should show upside resilience this week, even as short-term momentum becomes more overbought.

As such, profit-taking dips are likely to be shallow as investors should be more confident to return and bargain stocks, especially those in the construction, property and oil & gas sectors which have suffered losses in recent weeks.

Moreover, improvement on the eurozone debt situation following the decisive action taken by EU leaders to boost its rescue fund to €1 trillion as bondholders agreed to a relatively mild 50 per cent haircut on Greek debt, as well as stronger-than-expected US and Chinese economic data, should combine to boost sentiment further.

Hence, blue chips such as CIMB, Gamuda, Genting Bhd, RHB Capital and MMHE at current levels are good to accumulate for further upside potential in the medium term, while lower liner property counters like Hua Yang, Mah Sing and UOA Development should enjoy gains in the immediate term, given the strong upside bias after stock prices have been heavily and unfairly sold down in recent weeks.

On the other hand, investors should look to take profit or sell AirAsia and Supermax, since both register overbought RSI reading of above 70.

On the index, immediate resistance comes from 1,488, the 61.8per cent Fibonacci Retracement (FR) of the sell-off from the 1,597 record high of July 11 to the recent pivot low of 1,310 on September 26, matching last Friday's high.

A breakout going forward would see stronger resistance from the 100-day and 200-day moving averages at 1,495 and 1,512 respectively, being challenged, while the 76.4 per cent FR at 1,529 would act as a formidable upside barrier.

Immediate support on profit-taking dips will be at 1,454, the 50 per cent FR, with better retracement support at 1,420, the 38.2 per cent FR, followed by 1,400 and then 1,378, the 23.6 per cent FR.

The subject expressed above is based purely on technical analysis and opinions of the writer. It is not a solicitation to buy or sell.

Are weak IPOs worth another look?

KUALA LUMPUR: Many of this year’s initial public offering (IPO) stocks have been among Bursa Malaysia’s worst performers — but are they now worth another look?

Interest certainly appears to be returning to them, as investors are starting to take notice of stocks that have fallen under the radar and are offering good bargains.

In the past 1½ weeks, stocks such as UOA Development Bhd, MSM Malaysia Holdings Bhd and Petronas Chemicals Group Bhd have regularly dominated either the top actives or gainers lists, while others like Oldtown Bhd and Benalec Holdings Bhd have bounced well off their lows on high volume.

Many of the newly listed stocks slumped after their debuts. Fuelled by weak market sentiment, they have fallen more than the general market due to a high number of short-term investors, such as venture capitalists, high net worth placees and short-term institutional funds, exiting these stocks, said industry observers.

The renewed interest in IPOs was triggered on Oct 13, when UOA emerged from almost nowhere as one of the most actively traded stocks, closing 22 sen or 17.2% higher at RM1.50.

The stock again emerged as one of the most actively traded a week later last Thursday when it surged 19 sen or 12.58% to RM1.70.

Though ending last Friday lower at RM1.59, the stock has gained 37.1% since hitting a low of RM1.16 on Sept 27. Its net assets per share was RM1.35 as at June 30.

Even now, the stock is still 38.8% off its IPO price of RM2.60 when it was listed on June 8. During its lows, few had noticed that UOA had actually slumped more than 55.4%.

The Edge Financial Daily took a look at some of the best and worst performing IPOs this year, and which stocks may be of interest to investors.

As at last Friday, only eight out of 26 companies listed this year were winners.

The two biggest losers were MClean Technologies Bhd (-68.3%) and XOX Bhd (-69.4%), for fairly obvious reasons as their results have been less than impressive.

They were followed by UOA (-38.8%), Maxwell International Holdings Bhd (-34.3%), Oldtown (-12.8%), and Hibiscus Petroleum Bhd (-10%).

Listed on the ACE Market on May 10, MClean’s share price has dropped 68.3% to 16.5 sen from its listing price of 52 sen.


MClean, which provides precision cleaning services for hard disk drives, caused shock waves when it announced a net loss of RM190,000 just three weeks after its listing in May.

Another ACE Market-listed company, XOX tumbled 69.4% to close at 24.5 sen last Friday, compared with its offer price of 80 sen.

XOX also stunned when it reported a loss of RM1.66 million for 1QFY11 just a day before its debut. The loss sent its share price south by more than 35% on its debut. For its 2QFY11, XOX reported a net loss of RM2.92 million, due to higher selling and distribution expenses.

Value among major losers?
Not all of the IPOs that fared badly were due to their fundamentals, with UOA, Maxwell and Oldtown among those that could look attractive.

Affin Investment Bank has a “buy” call on UOA with a target price of RM2.07.

“We believe that value has emerged after UOA’s sharp share price correction,” it stated in an Oct 12 report.

UOA recently strengthened its landbank with the proposed acquisition of 9.8 acres of freehold land in Kepong for RM72.9 million or RM170 psf.

The report said it expects UOA’s other standalone residential projects such as Setapak Green and Sri Petaling and current unbilled sales of RM684 million to help sustain its medium-term earnings and dividend yield of over 5.5%.

China-based sports footwear designer and manufacturer Maxwell saw its share price close at 35.5 sen on Friday, down 34.3% from its IPO price of 54 sen in January.

While investors have been cautious of China-based companies in general, Maxwell appears to have a good earnings track record and high dividends to boot.
Between 2006 and 2010, Maxwell’s revenue and net profit saw a compound annual growth rate of 46% and 53% respectively.

For its first half this year, it had a cumulative revenue of RM157.34 million and net profit of RM26.99 million. With half-year earnings per share (EPS) of 6.75 sen, its annualised price-earnings ratio (PER) would be just 2.63 times.

Maxwell paid its maiden dividend of 3.35 sen net per share on Sept 28, representing a 9.4% net yield on its prevailing price.

Hibiscus, a special purpose acquisition company, was the first of its kind to be listed on Bursa Malaysia in July. It elicited some negative publicity then for its relatively high premium for what was essentially seen as a cash-rich shell company with management expertise.

From an IPO price of 75 sen though, Hibiscus’ share price has tumbled by 10% to 67.5 sen, above its cash per share of 58.6 sen. Hibiscus has three years from the time of listing to acquire a target company or asset, failing which it will be liquidated.

Meanwhile, despite the resilience of the food and beverage (F&B) sector, Oldtown saw its share price dip by 12.8% to RM1.09 from its IPO price of RM1.25.

Listed in July, the local coffee manufacturer and cafe operator is penetrating the China consumer market by opening its first two cafes in Guangzhou this month. Oldtown has set up a food processing centre in China and is targeting to open more outlets, especially in southern China, to achieve greater economies of scale. Although not rated, a report by OSK Research on Sept 20 valued Oldtown at 12.5 times FY11 EPS, which translates into a fair value of RM1.34.

Top performers: Are they still worth buying?
Some of the IPO stocks which had the best returns as at last Friday are Boilermech Holdings Bhd (+93.9%), Berjaya Food Bhd (BFood) (+71.6%), MSM Malaysia Bhd (+42.9%), Bumi Armada Bhd (+20.8%), and Benalec Holdings Bhd (16%).

Listed on the ACE Market on May 5, Boilermech has been the best performing IPO this year gaining 93.9% to 64 sen from its listing price of 33 sen. Still, the stock has fallen 35.7% from an all-time high of 99.5 sen in May.

A biomass boiler manufacturer, Boilermech is a 35% associate company of food and agriculture group QL Resources Bhd. It is primarily engaged in the manufacture of boilers for the plantation, manufacturing and food industries.

Boilermech’s performance, market observers said, was attributed to its strong parent, QL Resources and its exposure to the renewable energy sector.

The second best performer was BFood, which is mainly involved in the operations of Kenny Rogers Roasters (KRR) restaurants in Malaysia. The stock has climbed 71.6% to 87.5 sen last Friday from its IPO price of 51 sen.

With 68 restaurants, BFood plans to open another 15 KRR restaurants in FY12. Via a joint venture, it will also expand its KRR operations in Indonesia where it targets to open 12 stores by end-June 2012.

For its FY11 ended April 30, its net profit was up by 17% to RM10.2 million from RM8.68 million in FY10. Revenue grew by 19% to RM71.9 million from RM60.42 in FY10.

BFood has a clean balance sheet with net cash of about RM31.29 million and no borrowings as at end-July. It paid its first interim dividend of three sen in FY11, amounting to RM4.26 million, which translates into a payout ratio of 41.8% and net yield of 3.4%. BFood’s earnings for FY13 onwards will get a boost from the ongoing acquisition of a 50% stake in Berjaya Starbucks Coffee Co Sdn Bhd, which will be concluded in 1Q12. It targets to open 12 to 15 Starbucks outlets every year.

Last Friday, the stock had a historical PER of 12.4 times and market capitalisation of RM124.24 million. As a comparison, KFC Holdings (M) Bhd has a historical PER of 17.2 times and market capitalisation of RM2.697 billion.

MSM, the largest sugar refiner in the country, was listed at end-June with an IPO price of RM3.50. Its share price had gained 42.9% to RM5 last Friday, partly due to its small free float.

MSM has adopted a dividend policy to pay out at least 50% of its annual net profit. Assuming this payout level, annual dividends are estimated to be 20 sen per share in 2011/12, which translates into a net yield of about 4% at its closing price on Friday.

As at end-June, MSM had net cash of RM141.7 million, which will support future capital expansion. About RM320 million of the RM425 million proceeds from the IPO have been allocated for capital expansion over the next two to three years.

A report by OSK Research on Sept 27 had a “buy” call on MSM with a fair value of RM5.24.

Benalec worth watching
Analysts say Benalec is a stock worth watching, as the company is well-liked for its niche in land reclamation jobs where margins are high and competitors are few. Its land reclamation projects also provide Benalec with ample and low-cost landbank for property development.

Listed on Jan 17, the stock closed at RM1.16 last Friday, 16% above its offer price of RM1, but well below its year high of RM1.61.

Benalec is bidding for land reclamation projects with a combined estimated contract value of RM8 billion and has a large unbilled order book of RM590 million.

AmResearch and Kenanga Research have “buy” recommendations with a price target of RM2.22 and RM1.93 respectively.

Bumi Armada, an oilfield services provider, rose 20.8% to RM3.66 last Friday, compared with its listing price of RM3.03 in July.

In late September, Bumi Armada announced its wholly-owned unit Armada Balnaves Pte Ltd had signed a floating, production, storage and offloading contract with Apache Energy Ltd, Australia. Valued at about RM1.46 billion, the contract is expected to contribute positively to Bumi Armada’s revenue and earnings for FY11 ending Dec 31.


This article appeared in The Edge Financial Daily, October 24, 2011.

UOA Development shares extend rebound

KUALA LUMPUR: Shares in UOA Development Bhd have begun to recover after slumping up to 55% from its initial public offering price.

Investor interest has been gaining momentum in the last week as heavy trade buoyed the stock, which saw its volume peak at 39.9 million shares last Thursday.

UOA Development re-emerged on the top actives list yesterday, and was the fifth most actively traded stock with 35.43 million shares changing hands. It added 19 sen or 12.6% to close at RM1.70 yesterday.

“The stock sank due to the broader decline in the equity market. Property stocks tend to be hit the hardest as they have a higher beta and are more sensitive [to changes in the market],” an analyst with Affin Investment Bank told The Edge Financial Daily.

The stock, which listed on the Main Market on June 8, had plunged to a low of RM1.16 at end-September following months of steady decline. While the stock has since rebounded 46.6% from its lows, its current price is still 34.6% lower than its IPO price of RM2.60.

Affin Investment has maintained its “buy” call and target price of RM2.07 for the stock, a 20% discount to its revalued net asset value (RNAV).

“UOA Development may have been harder hit (relative to its peers in the industry) as there is a common misconception that the company has a heavy reliance on its Bangsar South development,” said the analyst.

According to the research house, the company currently has six projects under development across Kepong, Bangsar South, Segambut, Setapak and the KLCC area.

“Bangsar South does provide strong support to its earnings and sales though the company has several standalone projects too,” said the analyst.


Together, these projects have an estimated gross development value of RM2.07 billion. The company recently entered into a sale and purchase agreement to acquire a 9.8-acre (3.97ha) parcel of land in Kepong for RM72.8 million.

“We are neutral on the proposed acquisition as we think the acquisition price of RM170 psf is reasonable, and we believe there is a ready demand for new residential properties in the Kepong locality,” said Affin in a report issued earlier this week.

The company had gross cash and equivalents of RM368.37 million, with minimal borrowings of RM20.88 million as at end-June.

Director David Khor told the media that the recent purchase was part of five or six projects planned for next year.

The company recorded RM533 million in sales for 1HFY11, as it saw a higher contribution from its residential segment than its commercial segment. Contribution from its residential segment rose to 59% from 25%.

This article appeared in The Edge Financial Daily, October 21, 2011.

Glove makers, UOA Development and JCY up despite cautious market sentiment

PETALING JAYA: A string of stocks managed to attract investor interest in an otherwise cautious market and they included glove counters, property firm UOA Development Bhd and hard-disk drive maker JCY International Bhd.

Analysts said the price of latex touched RM8 per kg yesterday, off its recent high of RM11 per kg in April, signalling a possible downtrend in the price of the commodity.

Latex makes up more than 60% of glove makers' costs and a decline in its price is welcome news for the industry.

At the close, counters like Supermax Corp Bhd and Adventa Bhd were up 27 sen and 13 sen to RM3.22 and RM1.67 respectively.

In the case of Latexx Partners Bhd, news of a possible takeover could also have been a catalyst.

Latexx, which rose 14 sen to RM1.63, has been speculated to be the subject of a takeover for a few weeks now after a first attempt in May failed due to issues related to pricing.

Meanwhile, dealers attributed interest in UOA Development, which reached a multi-month high of RM1.70 after rising 19 sen, to “pure market play”.

The stock, at this level, is still 35% down on its June initial public offering (IPO) price of RM2.60.

CIMB Research said in a report that UOA Development's poor share price performance since its listing gave investors a chance to accumulate the stock, adding that investors' realisation of the strong core earnings growth for 2011 to 2013 could spark a re-rating, along with robust sales or more land-banking activities.

Hard-disk driver maker JCY was also on the active list yesterday, finishing one sen lower at 57 sen after hitting an intra-day high of 61 sen. JCY gave up its gains after CIMB Research issued a “trading sell” call on it, seeing that the stock had hit the house's target price.

On Wednesday, the stock put on 28% due to expectations that it would receive more orders as the floods in Thailand affected its competitors.

Sentiment remained cautious in the broader market with 232 counters finishing higher while 500 ended lower.

The 30-stock FTSE Bursa Malaysia KL Composite
Index was down 9.07 points, or 0.63%, to 1,441.18 at the close, with most investors still feeling nervous about the uncertainties in the debt-laden West.

Concerns over slower growth in economic powerhouse China also continued to weigh on investor sentiment, analysts said.

UOA Devt at near 2-month high, very active

KUALA LUMPUR: Shares of UOA Development Bhd surged to a near two-month high on Thursday, Oct 20 and it was very actively traded with more than 11 million shares done in the morning session.

At 12.30pm, it was up 13 sen to RM1.64, the highest since Aug 23. There were 11.29 million shares done.

It bucked the cautious overall market, where the FBM KLCI fell 15.10 points to 1,435.15. Turnover was 762.27 million shares valued at RM459.98 million. There were 144 gainers versus 477 losers.

This is the second time in six trading days that the share price had surged. It jumped to RM1.45 on Oct 13, a day after it announced that it would acquire 10 acres of Kepong land for RM73 million.

UOA Development had entered into a conditional sale and purchase agreement with Tago (Malaysia) Sdn Bhd for the proposed acquisition of a freehold land in Kepong for a cash consideration of RM72.9 million (RM170 psf). The freehold land measures approximately 428,801 sf (9.8 acres).

Affin Investment Bank Research said it was Neutral on acquisition and maintained a BUY with an unchanged TP of RM2.07.

However, the share price is sharply below its offer price when it was listed in June. Its institutional price was fixed at RM2.60 and the final retail price at RM2.52. At RM2.52, this was below the indicative retail price of RM2.90.