KUALA LUMPUR (Oct 23): Based on corporate announcements and news flow today, companies that might be in focus tomorrow (Monday, Oct 26) include the following: Hong Leong Financial Group (HLFG), Hong Leong Bank (HLB), Oriental Media, Gadang, Bursa Malaysia, Icon Offshore and Sumatec.
Hong Leong Financial Group Bhd (HLFG) has fixed its rights issue of 94.75 million new shares at RM11.60 each, raising gross proceeds of RM1.1 billion to partially fund its banking arm Hong Leong Bank Bhd's (HLB) RM2.99 billion rights issue.
The issue price represents a discount of 20.3% to the theoretical ex-rights price of RM14.55, which was calculated based on the five-day volume-weighted average market price (VWAMP) of HLFG shares, up to and including Oct 22 of RM14.82.
HLFG said in a filing with Bursa Malaysia that based on 1.05 billion HLFG shares in issue today, the rights issue will result in the issuance of 94.75 million new shares at an entitlement basis of nine rights shares for every 100 existing HLFG shares as at Nov 6.
Furthermore, HLFG has entered into a management and underwriting agreement with Hong Leong Investment Bank Bhd (HLIB), Maybank Investment Bank Bhd (Maybank IB), Nomura Singapore Ltd, AmInvestment Bank Bhd and CIMB Investment Bank Bhd for the underwriting of 21.50 million rights shares, for which no shareholders’ undertakings for its subscription had been obtained, representing 22.7% of the rights shares.
In a separate filing, HLB said it has fixed its renounceable rights issue of 287.81 million new HLB shares at RM10.40 apiece, raising gross proceeds of RM2.99 billion.
The issue price represents a discount of about 22.7% to the theoretical ex-rights price of RM13.45, which was calculated based on the five-day VWAMP of up to and including Oct 22 of RM14.20.
The entitlement is on the basis of four rights share for every 25 existing shares.
HLB had earlier said the proposed exercise will strengthen the group’s capital position to support its business growth and facilitate the build-up of an adequate level of capital buffer for forthcoming regulatory capital requirements.
The bank has also signed a management and underwriting agreement with HLIB, MIBB, Nomura Singapore, AmInvestment Bank and CIMB Investment Bank, for the underwriting of 21.5 million rights shares, for which no shareholders’ undertakings for its subscription had been obtained, representing 22.7% of the rights shares.
ACE market-listed Oriented Media Group Bhd (Omedia) is venturing into China e-commerce market via collaboration with Fujian Jin-Jiang E-Commerce Development Co Ltd and China-listed Xiamen Mass Entrepreneurship & E-Commerce Technology Co Ltd.
In a statement today, Omedia said its indirect wholly-owned subsidiary, Fujian Accsoft Technology Development Co Ltd, had inked two strategic cooperation framework agreements with the China parties.
"According to the agreement, both China companies will be providing their mass clientele the needed resources, professional technical expertise, as well as innovative technology. Omedia would be providing services on the technical development, software, and technology services," the statement reads.
Omedia said the 12-month collaboration with Fujian Jin-Jiang E-Commerce will be effective Oct 21; while the tie-up with Xiamen Mass Entrepreneurship will begin from Oct 22.
The collaborations includes a one-year extension option.
"This is the first step for our business venture into China's e-commerce market. The e-commerce sector is growing tremendously in China and we expect to share our professional expertise with more e-commerce companies in the near future," Omedia's management said in the statement.
The management believes that the new venture would provide a new income stream for the company.
Gadang Holdings Bhd has secured a RM375.13 million construcion project from Petroliam Nasional Bhd (Petronas). The project, involving infrastructure work, is located in Pengerang, Johor.
Petronas is undertaking its refinery and petrochemical integrated development (RAPID) project, there.
In a statement to Bursa Malaysia today, Gadang said it has accepted the letter of award (LOA) from Petronas' subsidiary PRPC Utilities, and Facilities Sdn Bhd. The letter was dated Oct 20, 2015.
The contract, to commence from the date of the LOA, with a contract period of thirty one (31) months, is expected to contribute positively to the earnings of Gadang for the financial year ending 31 May 2016 onwards.
Dragged by higher operating expenses (opex), Bursa Malaysia Bhd saw its net profit fall 3.06% to RM51.47 million or 9.6 sen a share for the third quarter ended Sept 30, 2015 (3QFY15), from RM53.09 million or 10 sen a share a year ago.
The stock exchange revealed in a filing that its staff costs, which formed the largest portion of its opex, was 9.53% higher at RM32.34 million in 3QFY15, compared with RM29.53 million in 3QFY14.
Revenue for 3QFY15 dropped by a marginal 0.1% to RM128.83 million, from RM128.96 million in 3QFY14.
Bursa also saw its trading revenue from the securities market fallen by 10.7% to RM57.3 million in 3QFY15, from RM64.2 million a year ago. As for the derivatives market, it recorded a revenue of RM25.8 million for 3QFY15, up 25.5% from RM20.6 million in 3QFY14.
For the nine months ended Sept 30, 2015 (9MFY15), the group's net profit rose 2.01% to RM148.01 million or 27.7 sen a share, from RM145.09 million or 27.2 sen a share. Revenue grew 2.04% to RM382.95 million, from RM375.28 million.
Meanwhile, Icon Offshore Bhd will lease two vessels to ExxonMobil Exploration & Production Malaysia Inc, under a short-term RM7.7 million contract.
In a statement to Bursa Malaysia today, Icon said the anchor handling tug supply vessels had been transporting supplies from supply bases to offshore oil and gas drilling rigs, and vice versa. The vessels are known as Icon Zara and Icon Ikhlas.
The company said Icon Zara has commenced its service on Sept 30, 2015 and shall continue for a period of six months, with an option for a one month extension period; whilst Icon Ikhlas has commenced its service on Oct 1, 2015 for a period of threemonths.
Sumatec Resources Bhd plans to place out 348.27 million new shares to raise funds, which will finance its upstream oil and gas (O&G) operations in Kazakhstan.
In a statement to Bursa Malaysia today, Sumatec said it intends to place out the shares to independent third party investors. Sumatec said it has yet to fix the price of the private placement shares, which constitutes about 10% of its issued base.
"The proposed private placement will enable the company to raise the necessary funds for its capital expenditure at the Rakushechnoye oil and gas field and general working capital, without incurring additional interest costs as compared to other means of financing, such as through bank borrowings or the issuance of debt instruments.
"Further[more], given the current economic climate and the volatility in global oil prices, the board is of the view that it would be prudent for the company to use equity to fund Sumatec's operations at the Rakushechnoye oil and gas field," Sumatec said.
According to Sumatec, the placement proceeds will finance expenses related to drilling of new O&G production wells and enhancement of existing entities.
The company said it would also use the funds to upgrade its O&G-related equipment. It hopes to complete the private placement by end of this year.
(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.)