KUALA LUMPUR (May 29): Based on corporate announcements and news flow today, companies in focus next Monday (June 1) are: Hubline, Mulpha International, KSL, Konsortium Transnasional, Ann Joo, Tanjung Offshore, Sarawak Cable, Lion Industries Corp, Pesona Metro, MyEG, Xinghe and Bintulu Port.
Loss-making logistics firm Hubline Bhd — which in February announced it was exiting the container shipping business — has proposed a rights issue and a private placement that are expected to raise about RM93.99 million.
Its filing with Bursa Malaysia showed the rights issue may raise about RM64.82 million, while the remainder RM29.17 will be raised via the private placement.
Hubline said it plans to issue 6.842 billion shares on the basis of two rights share for each existing share (2-for-1), together with 1.62 billion warrants on the basis of one warrant for every four rights shares (1-for-4).
Hubline said 51% or RM48 million of the proceeds raised will be used to repay debt, while 46% or RM43.65 million will be used as working capital; the remaining 3% or RM2.34 million will be channelled to corporate exercise expenses.
On the completion of the fund raising exercises, group total borrowings are expected to drop 21.3% to RM176.75 million, from RM224.7 million currently, it said.
Separately, Hubline said its net loss in the second quarter ended March 31, 2015 (2QFY15) has widened to RM369.33 million, from a net profit of RM2.01 million in 2QFY14, on a 51% plunge in revenue to RM44.996 million, from RM91.78 million previously.
For the cumulative six months ended March 31, 2015 (6MFY15), Hubline’s net loss expanded to RM375.19 million, from a net profit of RM5 million 6MFY14, on a 41% slump in revenue to RM108.87 million, from RM184.45 million previously.
Mulpha International Bhd returned to profitability for its first financial quarter ended 31 March, 2015 (1QFY15), with a net profit of RM41.23 million, compared to a net loss of RM20.36 million in 1QFY14.
The stronger performance in 1QFY15 was attributed to gain on disposal of subsidiaries of RM50.39 million and a favourable foreign exchange rate movement on the group's cash and deposits, which were denominated in US dollar, of RM22.91 million, it said.
Revenue for the quarter increased 28.64% to RM163.83 million, from RM127.35 million in 1QFY14.
Mulpha (fundamental: 0.8; valuation: 0.9) added that its hospitality division contributed to the group’s profit for the quarter, having recorded a pre-tax profit of RM4.55 million, from a pre-tax loss of RM6.14 million a year ago.
Johor-based property developer KSL Holdings Bhd saw its net profit rise 35% to RM82.5 million in the first quarter ended March 31, 2015 (1QFY15), from RM61 million a year ago, on higher progress billings and a favourable sales mix.
In a statement, KSL (fundamental: 2.6; valuation: 2.4) said its revenue went up 27% to RM263.8 million in 1QFY15, as compared to RM207.9 million in 1QFY14.
KSL Holdings said 85.5% of its group sales in 1QFY15 were derived from the property development segment, with the remainder 14.5% from its property investments segment — which comprises mainly of the integrated KSL City Mall, and KSL Hotel and Resort in Johor Bahru.
Revenue from the property development segment rose 31% year-on-year (y-o-y) to RM225.6 million in 1QFY15, from RM172.3 million, on enhanced progress billings.
The property investments segment saw its 1QFY15 revenue increase 7.3% y-o-y to RM38.2 million, as compared to RM35.6 million previously, on healthy occupancy rates and favourable tenant mix.
Public bus transportation operator Konsortium Transnasional Bhd saw its net profit for the first quarter ended March 31, 2015 (1QFY15) plunge 76% on-year to RM550,000, from RM2.3 million, due to lower business volume and high maintenance costs of its aged buses.
Revenue was down 22% to RM42.89 million, from RM55.14 million, its filing to Bursa Malaysia today showed.
Konsortium Transnasional said the implementation of the goods and services tax on April 1, together with lower earnings in the commodity related sectors, are expected to affect Malaysians' spending.
Separately, Konsortium Transnasional announced that the trading of its shares has been suspended from 4.10pm today, and will resume on 9am on Monday (June 1), but did not say why.
Ann Joo Resources Bhd is delaying its regional expansion plan, in view of the influx of China steel imports, which has put pressure on the selling price of its steel products.
Its group managing director Datuk Lim Hong Thye said Ann Joo (fundamental: 0.15; valuation: 2.0) initially planned to expand its footprint to the Southeast Asian region and move downstream to produce higher grade steel products by 2016.
But with the current situation, it will be hard for the company to allocate additional funds for expansion or capital expenditure, he told pressmen after the group’s annual general meeting today.
Lim added that for Ann Joo to go downstream, it will require a lot of research and development, and massive investment into equipment — both of which have been hindered by low selling prices, as a result of cheap steel products from China.
Lim pointed out that in the first quarter of 2015, Malaysia’s steel bar imports from China has increased 226%. He does not foresee the number going down in the near future.
Tanjung Offshore Bhd announced it is looking into reverting to a “pure play” oil and gas (O&G) service provider, as it views the current low oil prices will not be sustainable in the long-term.
Tanjung Offshore's chairman Datuk Mohd Hafarizam Harun said the group is optimistic about significant improvements in its O&G acivities and is investing in technologies that will realise lower operating costs.
His statement came with Tanjung Offshore’s (fundamental: 1.85; valuation 0.9) announcement that it has adopted a whistle-blowing policy to provide a platform for directors and employees to raise their concerns of any malpractices to strengthen the group’s corporate governance, from recommendations of a forensic audit by Ferrier Hodgson triggered by several “contentious transactions”.
This push for greater transparency is subsequent to the arrest of a former director of the company for the alleged fraudulent acquisition of Gas Generators (M) Sdn Bhd in 2013, for RM34.3 million.
Sarawak Cable Bhd saw its net profit surge almost nine times to RM11.94 million in the first quarter ended March 31, 2015 (1QFY15), compared to RM1.36 million in the previous corresponding period, on higher revenue from its transmission line, cables and conductors segments.
This translates into earnings per share of 3.74 sen in 1QFY15, as compared to 0.49 sen in the previous corresponding period.
In a filing with Bursa Malaysia, Sarawak Cable (fundamental: 0.25; valuation: 1.4) saw its revenue jump four times to RM343.61 million in 1QFY15, as compared to RM79.21 million in 1QFY14.
In a separate filing, Sarawak Cable said it declared an interim single tier dividend of one sen per share for the financial year ending Dec 31, 2015, with the date of entitlement and payment to be announced.
Lion Industries Corp Bhd (LICB) slipped into the red with a net loss of RM40.95 million in its third quarter ended March 31, 2015 (3QFY15), as compared to a net profit of RM8.68 million a year ago, due to lower sales in steel and building materials, and the settlement of a litigation claim of RM70 million.
Revenue for the quarter was down by almost half (42.6%) at RM672.73 million, from RM1.17 billion in 1QFY14, mainly on lower sales from its steel and property development divisions.
The group registered a higher loss from operations, mainly due to the losses recorded by the steel and property development divisions, LICB said in its filing to Bursa Malaysia.
For the nine months, the steel product manufacturer's loss widened to RM139.75 million, from a net loss of RM86.83 million in 2014.
Its cumulative nine months revenue declined 30.95% to RM2.26 billion, against RM3.27 billion last year, again due to lower sales from its steel and building materials divisions.
Pesona Metro Holdings Bhd’s net profit for the first financial quarter ended 31 March, 2015 (1QFY15) surged 328% to RM3.23 million, from RM0.75 million, due to a surge in profit from higher margin projects and contribution from the industrialised building system segment.
Quarterly revenue was down slightly at RM63.8 million, a 0.52% drop compared with 1QFY14.
MyEG Services Bhd's net profit jumped 39% to RM19.07 million or 1.6 sen per share for the third quarter ended March 31, 2015 (3QFY15), against RM13.74 million or 1.1 sen per share, mainly contributed by the online renewal of foreign worker’s permit and insurance.
MYEG (fundamental: 3; valuation: 1.1)’s 3QFY15 revenue grew 27% to RM38.97 million, from RM30.63 million last year.
In a filing to the Bursa Malaysia, the e-government concessionaire said the increase of revenue and profit for the quarter was primarily attributable to higher transaction volumes from online renewal of foreign workers’ permits and insurance; online transfer of vehicle ownership; and online renewal of motor insurance and road tax.
For the nine months, MyEG recorded a nearly 35% increase in net profit to RM45.2 million, from RM33.49 million a year ago; while cumulative revenue stood at RM96.46 million — up 28% from RM74.5 million last year.
A continuous growth in existing services related to motor vehicles owned by Malaysians, driven by its ongoing advertising and promotion campaigns to create and enhance brand awareness, also added to growth, MyEG said.
Xinghe Holdings Bhd bounced back with a net profit of RM41.95 million or 1.79 sen per share for the period ending March 31, 2015, compared to a loss of RM4.41 million in the same period last year, on the back of higher average selling prices of branded products and non-branded products.
In a filing with Bursa Malaysia, Xinghe (fundamental: 1.2; valuation: 0.9) posted a revenue of RM388.24 million for the period ending March 31, 2015.
The company did not disclose revenue in the previous corresponding period, as the financial year end of the company was changed from Jan 31, 2014 to Dec 31, 2014, on Dec 13, 2013.
Xinghe said its gross profit margin for the current financial quarter was 17.5%, an improvement from the 15.8% recorded for the calendar year 2014 (CY14), on the back of higher average selling prices of branded products, as well as non-branded products which increased by 5.1% and 7.1% respectively, over those of CY14.
In ringgit Malaysia terms, these percentages were 15.4% and 17.6% respectively, the differential being due to the appreciation of Renminbi against the ringgit, the statement read.
Higher volumes of produce sold, lower average cost of input raw materials and the strong seasonal demand for edible oil due to the Chinese New Year festivities during the current financial quarter, were also contributory factors to the higher profit.
Bintulu Port Holdings Bhd saw its net profit fall 13.53% to RM35.48 million or 7.71 sen per share for the first quarter ended March 31, 2015 (1QFY15), as compared to RM41.03 million or 8.92 sen per share previously, on higher amortisation of intangible assets and depreciation expenses.
In a filing with Bursa Malaysia, Bintulu Port (fundamental: 2.3; valuation: 1.1) posted a 1.98% increase in revenue to RM133.65 million in 1QFY15, as compared to RM131.06 million in the first quarter of financial year 2014 (1QFY14).
The cargo contributing to the increase in revenue include liquefied natural gas (LNG) and dry bulk cargo, namely bulk fertiliser and alumina.
The port operator also declared a first interim dividend of 6 sen per share for the financial year ending Dec 31, 2015 (FY15), amounting to RM27.6 million and payable on Aug 11, 2015.
(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.)