OSK Retail Research: Accumulate R&A Telco shares, upside at 15.5 sen

KUALA LUMPUR (Dec 28): OSK Retail Research has an upside target for R&A Telecommunication Group Bhd at the 15.5 sen level, while the cut-loss point is below the crucial 11.5 sen level.

It said on Wednesday that R&A had started building a new support floor at the 11.5 sen level since September this year.

“More noticeably of late is that the stock’s trading volume has been particularly high at around the 11.5 sen level throughout December, which could be the signal of an impending rebound.

“There is a possibility that the price consolidation could come to an end soon and therefore, we suggest traders should start accumulating its shares at the current level,” it said.



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RHB Research cautious on automotive sector in 2012 as economy slows down

KUALA LUMPUR (Dec 28): RHB Research Institute said the more cautious outlook and slowing economy in 2012 will likely see households and businesses alike reassess spending on big-ticket items.

“We expect total industry volumes (TIV) to remain relatively flat at 607,000 units in 2012 (2011 estimate: 604,000).

“We see some selective supply constraints of certain models continuing into 1Q12 arising from the flooding in Thailand, with Honda the most severely affected,” it said on Wednesday.

RHB Research said with 2011 turning out to be a year to forget for the auto industry, it was opting to remain cautious on the prospects for stocks in the sector and reiterate its Underweight call as it looks ahead into 2012.

The research house said other factors that bear a close watch over included the forthcoming revision to the National Automotive Policy and forex rates for the US dollar and yen.



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Affin Research maintains Buy on WCT, RM3.56 target price

KUALA LUMPUR (Dec 28): Affin Equities Research is maintaining its Buy call on WCT BHD [] at RM2.30 with a price target of RM3.56.

WCT had announced on Tuesday its unit was awarded an investment certificate to undertake a residential and commercial mixed development on a 46,577 sq m (11.5 acre) site in Ho Chi Minh City, Vietnam.

Affin Research said on Wednesday since the land area was only 11.5 acres, it did not believe the project would take 50 years to develop.

“We continue to believe in the long term potential of the property development business in Vietnam but with the eurozone debt crisis still unfolding and global economy expected to slow in 2012, short-term uncertainties remain,” it said.

The research house said that on the upside, there was recent good response to Gamuda’s Celadon City (Ho Chi Minh City) and Gamuda City (Hanoi) projects.

“Pending guidance on project launch date and gross development value, we maintain our FY11-13 forecasts, target price (at 15 times CY12 EPS) and BUY call for WCT.

“Recent tender failures and likely inability to secure RM2 billion of new projects this year are key concern,” Affin Research pointed out.



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HDBSVR: KLCI may back off from 1,500

KUALA LUMPUR (Dec 28): Hwang DBS Vickers Research (HDBSVR) says the benchmark FBM KLCI may back off a bit from the psychological barrier of 1,500 on Wednesday following a surge in the final minutes of trading on Tuesday.

It said the late surge saw Bursa Malaysia emerging as the only stock exchange among 11 regional peers tracked by HDBSVR to finish in the positive territory.

In its market outlook, it said as the market approached the tail-end of the year-end holiday season and with no visible market leads coming in from abroad, “we reckon trading activity on our Malaysian stock exchange would be sluggish today, just like the past two days when fewer than 1.0 billion shares were traded”.

HDBSVR said among the counters that could still garner investors’ interest are Metrod, which has proposed to dispose of its international operations for RM202 million; and Ingress, after receiving a letter of intent from Tenaga to be involved in power projects worth RM55 million.



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Demise of Latitute Tree’s major shareholder

KUALA LUMPUR (Dec 27): Taiwanese Lin Tzu-Keng, deputy chairman and largest shareholder of LATITUDE TREE HOLDINGS BHD [], passed away on Dec 26, the wooden furniture and component-maker said in a statement to Bursa Malaysia on Tuesday.

Lin, 57, also group CEO of the company’s 77.62%-owned Latitude Tree International Group Ltd (LTI), was “responsible for the development of the overall corporate strategies and business developments of the group”, the Singapore-listed unit told the Singapore Exchange in a separate statement.

“The board pays tribute to the late [Lin] for his great leadership, foresight and vision in driving and developing the group’s business,” executive director Yeoh Joe Son said in the statement to SGX on behalf of the board.

Pending the appointment of a new CEO, Yeoh, LTI’s group finance director, has been appointed acting CEO and continues to be in charge of finance.

Neither statement provided details surrounding Lin’s demise.

Lin’s spouse, Lin Chen Jui-Fen, 57, succeeded Lin as managing director of Latitude Tree on May 28, 2009, even as Lin took on the post of deputy chairman. That same day, Lin’s older brother, Tzu-Lang, 69, was re-designated from deputy chairman to executive director, according to its annual report.

As at Oct 28, 2011, the late Lin had 19.45% of Latitute Tree directly and was deemed interested in a 11.33% block held by his spouse. His brother, Tzu-Lang holds a 10.97%-stake directly.

The company’s other major shareholder is non-executive director Yek Siew Liong, a Malaysian, who through Konsortium Kontrek Sdn Bhd, has a 15.03% stake. Yek, 51, is group managing director and CEO of Hock Lee Holdings Sdn Bhd and its group of companies, with 23 years of experience in various fields including timber trading, logging, saw-milling, oil palm PLANTATION []s, shipping, petrol station, hospitality and property development, according to Latitute Tree’s annual report. Yek also hold directorships in Hock Lee Asia Bhd, Hock Lee Resources Bhd, Cinacom Bintulu Bhd and Sarawak Cable Bhd. He emerged as Latitute Tree’s substantial shareholder on May 18, 2007, filings showed.

Thinly-traded LTI’s market capitalisation stood at S$58.71 million at its last close of 24.5 cents on Dec 13, reflecting 1.13 times book value.



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Mah Sing takes legal action to stop sale of Jln Tun Razak land

KUALA LUMPUR (Dec 27): MAH SING GROUP BHD []’s unit has taken legal action to stop Asie Sdn Bhd and Usaha Nusantara Sdn Bhd from transacting in the 4.08 acres of land along Jalan Tun Razak following a dispute in the joint venture agreement (JVA).

Mah Sing said on Tuesday Grand Pavilion Development Sdn had filed a summons in chamber in the High Cout of Malaya to seek an interlocutory injunction over the land, known as Parcel K.

The legal action was to restrain Asie and Usaha Nusantara from transferring, assigning, selling, parting, disposing and/or dealing with the leasehold land.

“The plaintiff also seeks to restrain the defendants from granting to any party other than the plaintiff any right to deal with and/or develop Parcel K,” it said.

To recap, The Edge Financial Daily reported on Dec 14 that Mah Sing was informed by Asie that the JVA for the development of a tract of land has lapsed following the failure to meet an outstanding condition.

It said that Asie and its subsidiary Usaha Nusantara Sdn Bhd, through their solicitors, have taken the position that the JVA has lapsed and was of no effect from Dec 2, 2011.

However, Mah Sing maintained the JVA had not lapsed and issued a letter to Asie and Nusantara’s solicitors maintaining this position.

A deposit comprising 10% of the total cash payment payable to Nusantara, amounting to RM6.4 million with interest, was refunded to Mah Sing. However, Mah Sing returned the money, saying it was unable to accept the refund.

According to a previous announcement to Bursa, Grand Pavilion, Mah Sing’s wholly-owned unit and representative in the JVA, is entitled to proceed with the agreement by waiving any of the conditions if they are not fulfilled within the entitlement period.

The disagreement comes after both parties mutually agreed to extend the original deadline by a month and waive four out of five of the conditions in the JVA.

The remaining condition is the receipt by Grand Pavilion of the original issue documents of the title to the JV land with Nusantara endorsed as the legal and registered owner or an alternative arrangement accepted by Grand Pavilion.

Mah Sing announced in August it had secured the land, which formerly housed the Pekeliling flats, to develop a project called M Sentral that had a potential gross development value (GDV) of RM900 million.



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Xian Leng sinks deeper into red on RM52m impairment

KUALA LUMPUR (Dec 27): Fish breeder XIAN LENG HOLDINGS BHD [] sank deeper into the red in the third quarter ended Oct 31, 2011, reporting net losses of RM58.75 million compared with net profit of RM633,000 a year ago.

It said on Tuesday revenue declined to RM4.89 million from RM5.054 million a year ago mainly due to a drop in sales volume and the persistent aggressive price competition. Loss per share was 80.81sen compared with earnings per share of 0.87 sen.

“However, the group registered loss before tax of RM64.144 million as compared with a profit before tax of RM786,000 in the corresponding period last year mainly due to additional provision of impairment loss on property, plant and equipment amounting to RM63.29 million,” it said in the notes to the accounts.

Xian Leng said out of the RM63.29 million, a total of RM11.18 million was provided to one subsidiary involved in breeding tropical fishes, such as guppy, platy and cat fishes.

The RM52.11 million impairment loss was provided on the value of fish ponds of another subsidiary in the breeding of arowana fishes.

For the nine months, it posted net losses of RM61.57 million compared with losses of RM1.08 million in the previous corresponding period. Revenue was lower at RM12.16 million compared with RM15.42 million.



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Stocks to watch WCT, Ingress, Bumi Armada, Latitude Tree

KUALA LUMPUR (Dec 28): The FBM KLCI could extend its gains on Wednesday after breaching the psychologically-crucial 1,500 a day earlier following a late surge in buying in relatively thin trade.

However, investor participation at the regional markets was subdued given the extended holidays at some markets, as well as ahead of home price data and consumer sentiment in the US.

Meanwhile, European stocks edged higher on Tuesday morning following the long Christmas weekend, helped by a late rally on Wall Street on Friday where better-than-expected macro data fuelled hopes for the global economy, according to Reuters.

Among the stocks that could be in focus on Wednesday are WCT BHD [], INGRESS CORPORATION BHD [], Bumi Armada Bhd and LATITUDE TREE HOLDINGS BHD [].

WCT has been awarded an investment certificate to undertake a residential and commercial mixed development in Ho Chi Minh City, Vietnam. Its unit WCT (S) Pte Ltd will undertake the development on a land measuring 46,577 sq m in the New Urban Development Area of Saigon South in Ho Chi Minh City.

Ingress Corp’s subsidiaries via their joint venture have secured contracts worth a total RM55 million from TENAGA NASIONAL BHD [].

Metrod is set to realise a gain of about RM74.5 million from the disposal of its Austria-based units for RM202.2 million (€49 million).

It said on Tuesday that its wholly-owned subsidiary, Metrod (Singapore) Ptd had entered into an agreement with GEP II Beteiligungs GmbH to dispose ASTA Holdings GmbH and ASTA Elektrodraht GmbH.

Bumi Armada Bhd has acquired a vessel for RM68 million cash as part of its fleet expansion plan. It had exercised its option to purchase the vessel to a memorandum of agreement with Galaxy Naviera Maritime S.A. Panama signed on Sept 28 this year.

Taiwanese Lin Tzu-Keng, deputy chairman and largest shareholder of Latitude Tree Holdings Bhd, passed away on Dec 26, the wooden furniture and component-maker said in a statement to Bursa Malaysia on Tuesday

Lin, 57, also group CEO of the company’s 77.62%-owned Latitude Tree International Group Ltd (LTI), was “responsible for the development of the overall corporate strategies and business developments of the group”, the Singapore-listed unit told the Singapore Exchange in a separate statement on Tuesday.



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