CIMB Research has technical buy on Sunway at RM2.37

KUALA LUMPUR (Nov 17): CIMB Equities Research has a technical buy on Sunway Bhd at RM2.37 at which it trading at a price-to-book value of 1.2 times.

It said on Thursday that Sunway broke out of its bullish wedge pattern recently. Looking at the chart, it believed prices could still make one more upleg to test its October high of RM2.47 again. Once this level is taken out, the following resistance levels are RM2.60 and RM2.80.

“Technical landscape remains undemanding. MACD signal line is hovering in the positive territory while RSI is above the 50pts mark. We are also encouraged by the fact that its candles are holding all the key moving averages,” it said.

CIMB Research said any pullback towards its 30-day SMA is an opportunity to accumulate. However, always put a stop at between RM2.23-2.17, depending on one’s risk appetite. Falling below its 50-day SMA would negate this uptrend.



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Media Prima bags platinum award for CSR

KUALA LUMPUR Media Prima Bhd has won the platinum award for Best Corporate Social Responsibility at the National Annual Corporate Report Awards (NACRA) 2011 held Tuesday night.

It beat Malayan Banking Bhd and Telekom Malaysia Bhd, which received the gold award and the silver award respectively.

A total of 47 companies submitted their annual report for the adjudication process.

In a statement, the company said this achievement was a result of an extensive report for the year 2010, which included a comprehensive reporting of Media Prima's corporate responsibility initiatives throughout the group.

The initiatives were the Tabung Bencana NSTP-Media Prima, Bersamamu, Singgah Sahur, Aduan Rakyat, Sunshine Project and Pintar Project.

Media Prima group managing director Datuk Amrin Awaluddin said the award is another testimony to the group's continuous efforts in expanding and enhancing its corporate responsibility initiatives.

"This would not have been possible without the collective effort by all media platforms in the group to ensure a sustainable future for both the company and the community," he said.

The event was organised by Bursa Malaysia Bhd, Malaysian Institute of Accountants and The Malaysia Institute of Certified Public Accountants.

The awards are given to organisations as recognition of their commitment to produce a timely, informative, factual, and reader friendly reports.

Domestic Trade, Co-operatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob presented the awards to winners.



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Keurig invests RM30m in Johor

Integrated electronic manufacturing services (EMS) provider V.S. Industry Bhd has invested about RM30 million to produce Keurig single-cup coffee brewer machines in Senai here.

The dedicated 2.4ha facility will see V.S. Industry producing Keurig Inc's single-cup brewers and accessories for exports to North America.

The facility's 200,000 square feet area will also be used for its packing, logistics and storage.

Executive chairman Beh Kim Ling said the factory will be the company's 11th facility to assemble electrical products.


It has the full cooperation from its US partner Kuerig to exclusively produce the coffee-brewing machines starting next year.

"We are happy that our US partners have the trust in us as Keurig Inc is wholly-owned by Green Mountain Cofee Roasters Inc (GMCR) and they are one of the 100 most popular companies listed on Nasdaq.

"Despite the strict safety and quality requirements for the contract, we hope to start our first shipment by the first half of next year," Beh said at a press conference on Tuesday.

The event was officiated by Johor Menteri Besar Datuk Abdul Ghani Othman. Also present was Keurig president Michelle Stacy, its vice-president, who is also Kuerig's co-founder, Dick Sweeney and Iskandar Regional Development Authority chief executive officer Ismail Ibrahim.

Meanwhile, Stacy said the company chose Johor as its investment location due to factors such as political stability, ease of logistics and also technical know-how.

"Malaysia was selected after we visited several other countries like Indonesia, Vietnam and India. Johor offers good infrastructure, port facilities and also sound government policies that support companies like us," she said.

Ghani said data from Malaysian Investment Development Authority (MIDA) and the Johor Investment Centre showed that the state is able to manage its own foreign direct investments (FDIs).

"For the past seven years, Johor managed to attract a record of RM38.6 billion worth of FDIs. This has created more than 18,000 jobs.

"We also can offer the best location for FDIs as we also work hand-in-hand with MIDA and the Ministry of International Trade and Industry to source for potential investors to Johor," Ghani added.



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AMMB H1 net profit jumps 16pc to RM811m

KUALA LUMPUR AMMB Holdings Bhd has posted a 15.7 per cent growth in net profit to RM811 million for the first half of the year ending March 31 2012.

Growth was supported by higher non-interest income and lower allowances which was in line with the group's expectations, said group managing director Cheah Tek Kuang.

Its return on equity was up 1 per cent to 15.4 per cent compared to the first half of the previous year.

Total income grew 9.6 per cent to RM2.17 billion, driven by non-interest income growth of 31.7 per cent, he said at a media briefing here yesterday.

The group expects a challenging time ahead for the local banking sector due to persistent global headwinds but sees opportunities from the Economic Transformation Programme and Budget 2012 incentives.


"We estimate the economy to grow between 4 per cent and 5 per cent over 2011 and 2012," Cheah said, adding that the group is confident it can grow its profit by between 10 per cent and 12 per cent for the current financial year, from RM1.34 billion recorded in the previous financial year.

He said the group has lowered its expectations for the second half as it will not be "as strong as the last few years".

Cheah said for the next six to 12 months, the local banking sector is set to be vigilant against potential risks, with new macro-prudential measures being introduced by regulators on consumer loan products to curb financial imprudence risk in the household sector.

"Moderating loans demand and competition for deposits will continue to impact margins, while a tougher economic environment will likely put pressure on improving quality trends," said Cheah.

Deputy group managing director and chief financial officer Ashok Ramamurthy said the group will stay focused on growing non-interest income, current and saving accounts deposits and loans growth by targeting profitable and viable segments.

Reviewing the first-half year results, Ashok said the retail banking's net profit was down by 4.9 per cent due to margin pressure, while business banking division dropped 25.2 per cent. This was partly due to a prudent provisioning on a previously restructured loan during the global financial crisis.

Corporate and institutional banking did better with good income growth. Profit contribution from the investment banking division was also stronger by 35.9 per cent due to strong capital and equity market activities.

The board has proposed an interim single-tier dividend of 6.6 sen per share, 10 per cent higher then with the first-half of financial year 2011.



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Management buyout of Proton possible

Proton Holdings Bhd managing director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir has suggested that he and other senior company executives will be keen to buy over the national carmaker if offered.


“If we are offered (to bid for Proton), it is worth considering,” Syed Zainal told Business Times via a telephone interview.

Speculation is rife that Syed Zainal and Proton chairman Datuk Mohd Nadzmi Mohd Salleh have jointly bid for the company.

Syed Zainal, however, dismissed it as “mere speculation” and said that no management buyout (MBO) plan had been submitted to the government.

Such rumours sent Proton shares higher yesterday, becoming the second top gainer on Bursa Malaysia.

The stock close 32 sen higher at RM3.53 with 77.1 million shares traded.


Analysts said the steep rise in the share price may be due to talk that Khazanah Nasional Bhd, which is currently Proton’s single largest shareholder, has found a buyer for it.

“There is talk that the buyer could be Nissan or DRB-HICOM Bhd. The current board of Proton may plan an MBO as they see value in the company, which is currently trading at 0.5 times the book value,” an analyst at Maybank Investment Bank told Business Times.

Proton, which has a market capitalisation of about RM600 million, has about RM1 mybillion cash.

Both its plants in Shah Alam, Selangor, and Tanjung Malim, Perak, are currently under utilised, offering great potential for growth.

Last year, Proton’s domestic sales volume grew 3 per cent to 162,012 units, supported by its popular models like Saga, Persona, Exora and Inspira.

“The board is expecting that its wholly-owned unit Lotus Group International Ltd will turn around in 2013. It will be a shame to let go now,” the analyst said.

An analyst from TA Research believes the rise in the company’s stock could be because Proton and Japan’s Mitsubishi Motors Corp are close to inking a formal agreement to come up with new models.

Proton’s first-quarter net profit ended June 30 2011 was lower, dragged by expenses associated with the ongoing turnaround programme at Lotus Group.

The company saw its earnings in the quarter fall 93 per cent to RM4.5 million from RM84.6 million a year ago.



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Harvest Court plunges limit down

Harvest Court Industries Bhd shares slumped to the 30 per cent limit-down level yesterday, but in a sign of the changing times, there was no selldown on other penny stocks.

Most penny stocks rose in the early hours of trade. For example, Tricubes Bhd rose as much as 87 per cent, or 13.5 sen, to 29 sen and Fitters Diversified Bhd’s warrants increased by as much as 13.5 per cent, or 6.5 sen, to 54.5 sen each, before giving up some gains due to weakness in the Hong Kong stock market.

Tricubes ended the day at 26 sen, while Fitters warrants closed unchanged at 48 sen.

“There was no panic selldown in other stocks, with sentiment being affected by outside factors,”said a dealer.

Five years ago, it was a different story when a fellow ACE Market (then Mesdaq) counter was designated.


When Iris Corp Bhd was declared as a designated stock, it had caused a ripple effect on the broader market. The then benchmark Kuala Lumpur Composite Index (KLCI) fell by 0.15 per cent, while the Mesdaq and Second Board indices were down by 3.45 per cent and 4.63 per cent respectively.

The next day, when Iris resumed trading after suspension due to a material announcement, the KLCI fell by another 0.49 per cent, while that of Mesdaq and Second Board fell by another 3.45 per cent and 0.21 per cent respectively.

Iris shares had declined 26 per cent on its first day as a designated stock.

On Tuesday, Harvest Court was slapped by Bursa Malaysia Bhd and declared as “designated securities”. This means any investors who wants to buy the stock must pay cash upfront.

Harvest Court shares eased to RM1.49 yesterday and it appears that the announcement that the company had won a RM70 million contract failed to do much damage control or stop investors from dumping the shares.

"There were not many buyers willing to buy even at the RM1.50 level. The anticipation is that the stock may face another session of dumping tomorrow (on Thursday)," said a research head from a local brokerage.

Analysts also pointed out that retail investors today are more savvy. Therefore, their investment decisions are also based on a stock's fundamentals as well as local and foreign news flow.

"I think retailers have somewhat learnt their lessons, where they put their money on companies that are profitable, fundamentally sound, and so forth. It's a good change," the research head said.



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EPF sees PLUS returns

The Employees Provident Fund (EPF) expects a minimum internal rate of return of 10 per cent a year from its investment in the North-South highway operator.

"The investment in PLUS is expected to generate a stable and sustainable yield which fits well with EPF's strategic asset allocation," said Rohaya Mohammad Yusof, EPF's head of capital markets.

The fund holds 49 per cent of PLUS Malaysia Sdn Bhd, which in turn owns the North-South expressways and three other highways. UEM Group Bhd holds the remaining 51 per cent.

Rohaya and UEM group managing director and chief executive officer Datuk Izzaddin Idris held a joint press conference to announce the outcome of talks on a new toll deal as well as the end of UEM-EPF's takeover of PLUS Expressways Bhd's assets and liabilities.

Meanwhile, Izzaddin said UEM-EPF will maintain RM800 million a year in capital expenditure (capex) to maintain highways as part of efforts to preserve national assets.


"We will take care of highways such as the North-South Expressway as it is a key national asset that forms the backbone of Peninsular Malaysia's road infrastructure, " he said, adding that maintaining expressways is costly. For example, PLUS Expressways Bhd spent RM829 million for routine, heavy maintenance and upgrading works, compared with RM764 million in 2009.

"From a capex point of view, Penang bridge spent RM786 million to widen the bridge from two lanes to three each way. The widening, which commenced in 2005 and completed in 2009, was undertaken to accommodate traffic rise volume. Traffic volume is bound to increase and more capex will come in time," he said.



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Stocks to watch: Dialog, Malton, Tanjung Offshore, AMMB

KUALA LUMPUR (Nov 17): Stocks which could see trading interest on Thursday include DIALOG GROUP BHD [], MALTON BHD [], TANJUNG OFFSHORE BHD [], AMMB HOLDINGS BHD [], Amway (Malaysia) Holdings Bhd and ALLIANCE FINANCIAL GROUP BHD [] (AFG) following the release of their financial results for the quarter ended Sept 30.

Dialog posted net profit of RM44.54 million in the first quarter ended Sept 30, 2011, an increase of 34.6% from the RM33.09 million a year, underpinned by a strong increase in revenue, mainly from its New Zealand operations. Its revenue rose 35% to RM355.24 million from RM263.81 million while earnings per share were 2.26 sen compared with 1.69 sen.

Malton’s earnings jumped 118% to RM12.11 million in the first quarter ended Sept 30 from RM5.54 million a year ago, boosted by an improvement in the property development division from a year ago.

Revenue rose 44.3% to RM99.27 million from RM68.78 million while earnings per share were 2.90 sen versus 1.59 sen. Malton said pre-tax profit improved by 111.4% to RM16.7 million from RM7.9 million.

However, Malton's financial performance was slightly weaker compared with the immediate preceding quarter. Revenue declined from the preceding quarter’s RM167.9 million.

Tanjung Offshore Bhd swung into the red with net losses of RM429,000 in the third quarter ended Sept 30, 2011 compared with net profit of RM807,000 a year ago. Its revenue fell 14.3% to RM117.64 million from RM137.25 million a year ago. Loss per share was 0.15 sen compared with earnings per share of 0.29 sen.

For the nine months ended Sept 30, its net profit fell 51.9% to RM3.42 million from RM7.12 million a year ago while revenue was marginally lower at RM401.33 million compared with RM401.95 million. Tanjung Offshore had borrowings totaling RM560.53 million.

AMMB Holdings Bhd’s earnings rose 10.9% to RM369.47 million in the second quarter ended Sept 30,2011 from RM332.87 million a year ago, boosted by the group’s retail banking operations. Its revenue increased by 20.5% to RM2.138 billion from RM1.773 billion while earnings per share were 12.35 sen versus 11.08 sen. It declared a single tier dividend of 6.6% per share.

For the first half, its earnings increased by 15.6% to RM810.99 million while its revenue increased 17.6% to RM4.092 billion from RM3.477 billion.

Amway’s net profit rose 19.8% to RM25.77 million in the third quarter ended Sept 30, 2011 from RM21.51 million a year ago as it benefited from higher sales and improved gross margins due to the favourable foreign exchange impact. Its revenue rose at a slower pace of 5.4% to RM211.52 million from RM191.50 million while earnings per share were 15.68 sen compared with 13.08 sen.

Amway declared a third interim single tier dividend of 9.0 sen net per share and special interim single tier dividend of 30.0 sen net per share for the financial year ending Dec 31, 2011.

AFG reported a strong set of financial results for the second quarter ended Sept 30, 2011, with earnings up 18.2% to RM120.95 million from RM102.27 million a year ago. Revenue increased by 5.9% to RM314.60 million from RM296.98 million. Earnings per share were 7.9 sen compared with 6.7 sen.

For the first half, AFG's earnings rose 8.2% to RM250.51 million from RM213 million while its revenue increased 8.9% to RM624.37 million from RM573.20 million.



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