Yinson 3Q net profit jumps to RM8.07m

KUALA LUMPUR (Dec 23): YINSON HOLDINGS BHD [] net profit for the third quarter ended Oct 31, 2011 jumped to RM8.07 million from RM2.5 million a year earlier, due mainly from its marine transport business and gain on disposals of subsidiary and PROPERTIES [].

The company said on Friday that its revenue for the quarter rose to RM194.48 million from RM156.19 million in 2010.

Earnings per share for the quarter rose to 11.14 sen from 3.66 sen a year earlier, while net assets per share was RM 2.02.

For the nine months ended Oct 31, Yinson’s net profit rose to RM20.69 million from RM11.72 million in 2010, on the back of revenue RM549.91 million.

Reviewing its performance, Yinson said that the increase in revenue for the quarter was due mainly to increase in sales volume from its trading and marine transport business.

On its prospects, Yinson said the outlook of the global economy for the rest of 2011 had become significantly more uncertain following heightened downside risks in the advanced economies which could undermine continued global growth.

“Barring unforeseen circumstances, the group shall strive to sustain a satisfactory performance for the rest of the current financial year,” it said.



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TA Enterprise 3Q net profit dips 26.57% to RM11.73m on higher forex loss

KUALA LUMPUR (Dec 23): TA ENTERPRISE BHD [] net profit for the third quarter ended Oct 31, 2011 fell 26.57% to RM11.73 million from RM15.98 million a year earlier, weighed mainly by the increase in foreign exchange translation losses recorded in TA Global Group on financing activities.

The company said on Friday that its revenue for the quarter rose 12.9% to RM173.1 million from RM153.29 million in 2010.

Earnings per share for the quarter fell to 0.69 sen from 0.93 sen, while net assets per share was 92 sen.

For the nine months ended Oct 31, TA Enterprise posted net profit RM71.69 million compared to RM49.1 million while revenue rose to RM503.82 million from RM439.19 million in 2010.

Reviewing its performance, TA Enterprise said it recorded lower contributions from both the stockbroking arm and TA Global Group in the current quarter, as compared to the previous year’s corresponding period.

Although TA Global Group enjoyed higher interest income from financial receivables, and higher hotel profits in line with the increase in the number of hotels in operation subsequent to the group’s hotel acquisition exercises, the group recorded lower contribution from the property development arm, and high foreign exchange translation losses, it said.

On its prospects, TA Enterprise said global economic risk continued to weigh on regional growth prospects given the slow economic recovery in the US and sovereign-debt woes in Europe.

“Our local stock market activities have slowed down in the past few months but we anticipate market sentiments to moderately improve in the last quarter.

“Contributions from the group’s property divisions will continue to be positive despite growing uncertainties in the global economic landscape,” it said.

The company said domestic economy was expected to be resilient supported by accelerated government spending under the Economic Transformation Programme.

“Barring any unforeseen circumstances, the group is expected to show satisfactory performance in the current financial year,” it said.



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Market Commentary

The FBM KLCI index gained 4.69 points or 0.31% on Friday. The Finance Index fell 0.04% to 13364.57 points, the Properties Index dropped 0.06% to 981.49 points and the Plantation Index rose 0.56% to 7967.39 points. The market traded within a range of 6.08 points between an intra-day high of 1496.25 and a low of 1490.17 during the session.

Actively traded stocks include WIJAYA-WA, TMCLIFE-WA, SANICHI, UEMLAND, PERISAI, UTOPIA, ASUPREM, CYBERT, ENVAIR and BIMB-CB. Trading volume decreased to 942.51 mil shares worth RM886.66 mil as compared to Thursday’s 1204.40 mil shares worth RM1016.97 mil.

Leading Movers were CIMB (+9 sen to RM7.09), DIGI (+6 sen to RM3.74), GENTING (+12 sen to RM10.88), IOICORP (+5 sen to RM5.19) and TENAGA (+5 sen to RM5.84). Lagging Movers were MAYBANK (-10 sen to RM8.35), PBBANK (-8 sen to RM13.18), YTL (-2 sen to RM1.49), PPB (-12 sen to RM16.98) and AXIATA (-1 sen to RM4.98). Market breadth was positive with 413 gainers as compared to 292 losers. -- JF Apex Securities Bhd



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Sunway unit gets RM27.57m job from Hap Seng Land

KUALA LUMPUR (Dec 23): SUNWAY HOLDINGS BHD []’s unit has secured a contract worth RM27.57 million from Hap Seng Land Development (JTR) Sdn Bhd for the CONSTRUCTION [] of pilings, basement and ground floor for one block of 43-storey service apartment at Jalan Tun Razak, KL.

Sunway said on Friday that its wholly-owned subsidiary Sunway Construction Sdn Bhd’s unit Sunway Geotechnics (M) Sdn Bhd had been awarded the contract.

The company said the project was targeted for completion by Dec 12, 2012, and was expected to contribute positively to its earnings for the financial year ending Dec 31, 2012 onwards.



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Ingress Corp gets Proton contract worth RM84.8m over 5 years

KUALA LUMPUR (Dec 23): INGRESS CORPORATION BHD [] has received a letter of acceptance from Perusahaan Otomobil Nasional Sdn Bhd (Proton) with a total value of RM84.8 million over a period of five years to supply parts for new Proton models.

The company said on Friday its 90%-owned subsidiary Ingress Precision Sdn Bhd had been contracted to supply door sash.

Meanwhile, its wholly owned unit Ingress Engineering Sdn Bhd (IESB) would supply roof drip moulding and beltline moulding, it said.

Ingress said the supply door sash would start by the end of second quarter financial year (FY) ending Jan 31, 2014 with project duration of five years.

“The project is forecasted to generate total revenue for IPSB of approximately RM70.9 million whilst the total investment in tooling and equipment is expected to cost RM13.8 million,” it said.

It said the supply for the roof moulding project would commence by the beginning of the first quarter of the FY ending Jan 31, 2014, and was expected to generate total revenue for IESB of RM2.3 million.

Total investment for the project was estimated to be RM100,000 in tooling, it said.

Meanwhile, supply for beltline job would start by the end of first quarter of FY ending Jan 31, 2014.

“The project is forecasted to generate total revenue for IESB of approximately RM11.6 million whilst the total investment in tooling and equipment is expected to cost RM800,000,” it said.

Ingress said the projects were expected to contribute positively to its earnings.



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KLCI closes higher ahead of extended weekend

KUALA LUMPUR (Dec 23): The FBM KLCI closed higher on Friday, in line with the generally positive sentiment at key Asian markets spurred by signals of some strengthening in the US economy as new claims for unemployment benefit dropped to their lowest in 3-1/2 years.

The 30-stock FBM KLCI rose 4.69 points to 1,496.15.

Gainers led losers by 413 to 292, while 343 counters traded unchanged. Volume was 942.51 million shares valued at RM886.66 million.

At the regional markets, Hong Kong’s Hang Seng Index rose 1.37% to 18,629.17, Taiwan’s Taiex added 2.07% to 7,110.73, South Korea’s Kospi gained 1.07% to 1,867.22, the Shanghai Composite Index was up 0.85% to 2,204.78 and the Singapore Straits Times Index edged up 0.44% to 2,676.47.

Meanwhile, European stocks rose in early trade on Friday, extending the week's thin-volume, pre-holiday rally after reassuring US economic data in the previous session gave a short-term fillip to a market still overshadowed by the euro zone debt crisis, according to Reuters.

On Bursa Malaysia, BAT was the top gainer and rose RM1.32 to RM49.20; Lafarge Malayan Cement added 30 sen to RM6.90, Petronas Dagangan and Batu Kawan were up 28 sen each to RM17.30 and RM17.28, KLK 20 sen to RM22.20, Advanced Packaging 17 sen to RM1.35 and IJM Corp gained 16 sen to RM5.58.

Among the decliners, PPB fell 12 sen to RM16.98, Shell 11 sen to RM9.19, Tasco, Maybank and Kretam lost 10 sen each to RM1.55, RM8.35 and RM2.40 respectively, while SCGM, HELP, Sarawak Oil Palm fell nine sen each to 45 sen, RM1.62 and RM5.36 respectively, while JobStreet was down eight sen to RM2.22.

The actives included Sanichi, UEM Land, Perisai, Utopia, Astral Supreme and Envair.



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Proton sale will involve a general offer

KUALA LUMPUR: The sale of Proton Holdings Bhd would be subjected to a general offer as Khazanah Nasional Bhd is looking at selling its entire 42.7% equity stake in the national carmaker.

Khazanah managing director Tan Sri Azman Mokhtar said in written replies to The Edge weekly that they have been receiving offers for various forms of collaboration, including acquiring its controlling stake in Proton but have not arrived at any decision to sell to any particular offeror.

He said Khazanah would have to take into account how the divestment would help upgrade the national car manufacturer and also the domestic automotive industry as Proton was an integral part of the national industrial policy.

“For minority shareholders, we can confirm that Khazanah views any sale to be done on the full 42.7% of its stake and that would mean that it would therefore, under the takeover code, be subjected to a general offer,” he said.

In written replies to a special focus on public private partnerships featured in The Edge weekly’s year-end issue, Azman touched on reasons why Khazanah was disposing its stake in Proton.

The national car manufacturer has been in the news of late as it was reported that several parties were eyeing Khazanah’s stake. Among the more serious bidders are DRB-Hicom Bhd and the Naza group.

Azman has confirmed that the sale of Khazanah's 42.7% stake in national carmarker Proton would, under the takeover code, be subjected to a general offer.

It has also been reported that Sime Darby Bhd’s automotive division and US-based General Motors may also be interested in Proton.

However, it is learnt that the bidders, especially the local automotive groups, are not keen on undertaking a general offer for the rest of the shares in Proton as it would strain their financial resources.

An official close to one of the local bidders said that if the takeover of Proton involved a general offer, then the offeror might not have enough resources to inject more capital to revive Proton.

“Proton needs cash to develop new models. If the takeover involves a general offer, it will be difficult for the offeror to develop Proton,” said an official.

At RM4.46 per share, Proton has a market capitalisation of RM2.45 billion. However Proton’s net asset per share is RM9.81 as at Nov 29, 2011, indicating that the company has a lot of assets. Among the prime assets in Proton is its land where the Shah Alam plant is currently located.

One way to unlock value is to shift the Shah Alam plant to Tanjong Malim where Proton has built a huge manufacturing plant that is under-utilised. In fact in 2007, Sime Darby had expressed interest to take over Proton mainly to capitalise on its land bank that is next to its successful township in Subang Jaya.

Apart from Proton, Azman also talked about why Khazanah went into a share swap with the Tune Air group, in which it ended up with a 10% equity stake in AirAsia. In return, Tune Air has a 20.1% stake in MAS.

The deal has come under fire from critics who questioned why Khazanah went into the share swap exercise at the time when the share price of MAS was weak while AirAsia was flying high.

Azman had said that Khazanah did extensive due diligence and any proper analysis would show that the swap was done at proper valuations and prices. He said that most analysts had a buy call on AirAsia and sell call on MAS.

“Even so, the correct or rather complete way to view the swap in financial terms is actually to anticipate what would be the value of holdings had we not done such a swap,” he said.

He said that it was clear the situation in MAS was rapidly deteriorating and additional efforts were needed to reverse the situation.

“But overall, yes, we do agree that we and especially MAS have a lot on our plate to ensure that we execute and communicate this well. The year 2012 will be critical,” he said.


This article appeared in The Edge Financial Daily, December 23, 2011.



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Time to shorten disclosure time frame?

In the past few months, Bursa Malaysia has seen some interesting shareholding changes in some penny stock companies.

Companies such as Envair Holdings Bhd, Sanichi Technology Bhd and DVM Technology Bhd have seen quick enter-and-exit shareholders. The three are listed on the ACE Market whose market capitalisations are below RM50 million.

The roller coaster rides of the share prices that coincide with substantial shareholding changes raise the question whether the existing time frame for disclosures on changes in substantial holdings should be tightened further.

According to the Companies Act 1965, substantial shareholders need to notify the listed company within seven days of the shareholding transaction. This also applies to emerging and ceasing substantial shareholders.

Under Bursa Malaysia’s ACE Market Listing Requirements, the listed companies are required to make an immediate announcement to the stock exchange upon receipt of notifications from substantial shareholders.

But, is seven days too long considering the significant impact insider moves could have on share price movement?

This is because while these new substantial shareholders had immediately notified the companies of their emerging substantial stakes, it took some of them awhile to notify the companies when paring down their stakes.

Take Envair Holding Bhd for example.

Carpet Raya Sdn Bhd director Deepak Jaikishan emerged as a substantial shareholder in Enviar on Dec 2 with a stake of 5.06%. He then sold the entire stake less than two weeks later on Dec 14.

The announcement of Deepak becoming a substantial shareholder was made to the stock exchange on the very same day he acquired the shares. However, the announcement of his exit was made seven days later, although that was within the regulated time frame.

Before Deepak’s entry and exit, the Envair also saw the entry and exit of two Chinese nationals.




On Nov 1, Chinese national Jiang Chuan Yi emerged as a substantial shareholder when he bought a 6.75% stake in a direct deal on Nov 1. He then sold the same stake on Nov 23, and announced to the exchange on the same day. Envair rallied 277% to 41.5 sen on Nov 1 from 11 sen a month earlier.

It had pared down since to close at 32 sen yesterday. Prior to that, Envair was trading quietly between eight sen and 14.5 sen.

Last month, Envair announced that it was entering the oil and gas business by supplying two million barrels of light crude oil monthly to a Chinese company for a five-year duration.

Another Chinese national, Zhang LiYing bought 10.8 million Envair shares or a 9.11% stake in a direct deal on Oct 13 but it was only notified on Nov 2.

Zhang then sold off the 10.8 million shares on Dec 14 on the open market, and notified Bursa Malaysia on Dec 16. It is not known if Jiang and Zhang are linked to the Chinese company.

Another company that saw quick entry-and-exit shareholding changes is Sanichi.

On Aug 3, Mohd Wira Abdul Daim, the son of former finance minister Tun Daim Zainuddin, emerged as a substantial shareholder in Sanichi after he bought a 6.12% equity stake.

The transaction was immediately notified to Sanichi and Bursa Malaysia on the same day the shares were bought. Wira only held the stake for two days before he sold all 10 million shares on Aug 5. However, the notification was only filed with Bursa Malaysia six days later on Aug 11.

Sanichi rose to an earlier 15-month high of 10.5 sen on the next day after the announcement that Mohd Wira bought into the company. Prior to that, Sanichi was only trading in the range of 3.5 sen and six sen.

Trading of Sanichi shares were halted on Aug 4 at 4.05 pm due to an announcement that a Germany firm Projektarbelt Technische Beratung Venretung International (Protev) is commencing due-diligence process on the company.

Sanichi and Protev had earlier signed a memorandum of understanding (MoU) to form an alliance to set up a one-stop plastic injection mould fabrication solution centre. After Mohd Wira’s entry-and-exit, Sanichi’s shares slumped back to as low as four sen on Aug 29, down 62% from the peak of 10.5 sen.

Its shares later saw another spike that could be linked to an agreement with an Indonesian company to market and distribute three million metric tonnes of coal annually in China.

Sanichi had triggered two unusual market activity (UMA) queries from Bursa Malaysia — on Nov 8 and Dec 12. Sanichi closed at 13 sen yesterday.

Until today, it is not known why Mohd Wira had emerged as substantial shareholder in Sanichi for barely three days.

Meanwhile, DVM Tech also saw a quick entry-and-exit shareholder.

On Aug 2, Raymond Yip Wai Man bought 12.98 million shares or a 7.4% stake on the open market in DVM Tech. He then bought another 1.43 million and 3.95 million shares in two separate open market transactions on Aug 4 and 12 respectively, bumping his stake to 10.43%.

However, he ceased to be a substantial shareholder when he disposed 9.8 million shares on Aug 15. The disposal was only filed on Aug 18 while the acquisitions were filed on the days they were purchased.

On Aug 2, Danish citizen Christian Kwok-Leun Yan Heilesen bought 12.05 million DVM Tech shares, or a 6.85% stake on the open market. DVM Tech had closed at 25 sen that day. The transaction was notified to the company and Bursa Malaysia on Aug 4.

On Aug 12, he acquired an additional 4.6 million shares, bumping his shareholding to 9.46%. The notice was filed on the same day.

On Aug 15, Heilesen ceased to be a substantial shareholder when he sold 8.35 million shares. DVM Tech closed at 15 sen on Aug 15. The notice was only filed with Bursa Malaysia three days later.

DVM Tech saw its share price surge 233% to 25 sen on Aug 2, from 7.5 sen a month earlier. It had since fallen to close at 8.5 sen yesterday.

What is interesting about these three companies is that they have seen their share price increase prior to the emergence of the shareholders, and then on a declining trend after that.

In some instances, the substantial shareholders had taken some time (although all within the seven days time frame) before notifying their shareholding changes to the companies.

As such, there could be instances where retail investors bought shares in a company due to the entry of new shareholders, only to see the same shareholders exit the company at the same time.

While it is not known why these shareholders had quickly entered and exited these companies, perhaps it is time for regulators to consider shortening the disclosure period from seven days.

This is in line with how fast information is disseminated these days via the Internet and mobile services, and how efficient and sensitive markets are to news.

After all, the present seven-day disclosure rule was shortened from 14 days earlier. With current technology and reduced dependence on snail mail, perhaps a shorter period is now warranted?

A shorter period would be good to prevent any instances of speculation due to the emergence of new shareholders.


This article appeared in The Edge Financial Daily, December 23, 2011.



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