Axis REIT, Atlan, OWG, Hai-O, Scan Associates, Teck Guan and Asia Knight

Axis REIT, Atlan, OWG, Hai-O, Scan Associates, Teck Guan and Asia Knight
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KUALA LUMPUR (Oct 13): Based on corporate announcements and news flow today, companies that may be in focus on Thursday (Oct 15) include: Axis REIT, Atlan, OWG, Hai-O, Scan Associates, Teck Guan and Asia Knight.

Axis REIT Managers Bhd, the manager of Axis Real Estate Investment Trust (REIT), will promote its chief operating officer (COO) Leong Kit May to the position of chief executive officer (CEO) on Jan 1 next year, replacing Datuk George Stewart LaBrooy, who will retire on Dec 31.

Axis REIT said it has received approval from the Securities Commission Malaysia, vide its letter dated Oct 13, for the appointment.

LaBrooy will continue to serve the board as a non-independent non-executive director, after his retirement.

Atlan Holdings Bhd recorded a 44% drop in net profit at RM4.67 million or 1.84 sen per share, despite higher revenue of RM192.2 million, due to lesser contribution from various sectors in its second quarter ended Aug 31, 2015 (2QFY16).

In a filing with Bursa Malaysia today, Atlan Holdings declared a second interim single tier ordinary dividend of 7.5 sen per share, amounting to RM19 million that would be paid on Oct 30, for the financial year ending Feb 29, 2016.

In its eight months cumulative period ended Aug 31, 2015 (8MFY16), net profit fell 8.53% to RM17.6 million against a 7.63% higher revenue of RM378.66 million than the corresponding period last year.

According to its segmental results, profit in the duty free sector and automotive sectors in the 2QFY16 was lower than the corresponding quarter last year, due to foreign exchange losses, as a result of the weakening ringgit.

Only World Group Holdings Bhd (OWG) has declared a first interim dividend of 2.8 sen per share for its financial year ending June 30, 2016 (FY16).

The group said the dividend will be paid on Nov 16, and that the ex-date is on Oct 27.

In its fourth quarter ended June 30, 2015 (4QFY15), OWG registered a net profit of RM2.91 million or 0.02 sen per share, on the back of RM20.41 million in revenue.

The group’s net profit for the six month period (6MFY15) stood at RM14.16 million, with a revenue of RM86.89 million.

Hai-O Enterprise Bhd is in talks with suppliers to procure raw materials from China in renminbi terms, after estimating that its gross profit margin would drop by 1% to 2% due to a weaker ringgit.

Hai-O's group chief financial officer Hew Von Kin said: "Based on our rough estimation, year-to-date, the ringgit against the US dollar has dropped more than 20%. We estimated about 1% to 2% drop of our gross profit margin."

Hew said in order to mitigate the impact of the volatility of the foreign exchange movement, Hai-O has renegotiated with its suppliers from China, to deal in renminbi terms. Year-to-date, the ringgit depreciated 18.71% against the US dollar, and 16.37% against the renminbi.

He said the strategy is significant, as about 80% of its import purchases are made in US dollar terms.

Guidance Note 3 (GN3) company Scan Associates Bhd has removed its chief financial officer (CFO), Nurul Huda Zaharol Natrar.

According to its filing with Bursa Malaysia today, Nurul Huda, 43, was terminated with immediate effect.

She had previously served as a senior manager in the department of corporate finance in the Naza Group of Companies, from 2006 to 2009. She was also an assistant vice president in the consumer banking department in CIMB Bank Bhd, from 2005 to 2006.

Cocoa products manufacturer Teck Guan Perdana Bhd told Bursa Malaysia today that it had no idea why its share price rose substantially.

Yesterday, Teck Guan gained 31 sen or 29.5% to close at RM1.36. Today, the stock continued to gain investors' interest and was one of the top gainers across the exchange, which saw it rise to as much as 16.17% to RM1.58.

At the close of trading hours, the stock pared some of its gains to settle at RM1.45, still up 13 sen or 9.56%, for a market value of RM59.74 million.

Teck Guan's shares had gained about 71.3% this year, outperforming the KLCI's 2.8% drop.

Plastic parts manufacturer Asia Knight Bhd — which fell into Practice Note 17 (PN17) status in October last year, following a disclaimer of opinion on its financial statements ended June 30,2014 (FY14) — is looking to regularise its condition by venturing into the construction sector.

In its proposed regularisation plan submitted to Bursa Malaysia today, Asia Knight said it had entered into a conditional share sale agreement (SSA) to acquire 100% of construction company, PA Builders Sdn Bhd, from Mazlan Mohd Yunus and Foo Onn (the vendors), for a purchase consideration of RM75 million, to be satisfied via RM5 million cash and 350 million new Asia Knight shares, at an issue price of 20 sen each.

In consideration of Asia Knight agreeing to buy the entire stake in PA Builders, the vendors have made a covenant and agree to warrant to Asia Knight that the profit after tax of PA Group for the financial years ending July 31, 2016 and July 31, 2017 shall not be less than RM8 million per financial year.

“The proposed acquisition will allow Asia Knight to venture into construction business, an industry with positive growth prospects via a profitable company, as a means to improve the financial performance of the group and to enhance its shareholder value.

“Without the proposed acquisition, the company will not be able to regularise its financial position and will be delisted, given its PN17 status,” it said.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)