KUALA LUMPUR (May 20): Based on corporate announcements and newsflow today, stocks in focus tomorrow (Thursday, May 21) could include: IFCA MSC, JCY International, Kian Joo Can Factory, Favelle Favco, Affin Holdings, CIMB Group, Kuala Lumpur Kepong Bhd (KLK), Batu Kawa and Deleum.
IFCA MSC Bhd has proposed to acquire Indonesia-based PT IFCA Consulting Indonesia (PICI) for RM32 million.
PICI is principally engaged in the provision of turnkey business solutions and mainly distributes IFCA’s (fundamental: 3; valuation: 0.8) computer software to the property sector in Indonesia.
In a statement to Bursa Malaysia, IFCA said today that it entered into a heads of agreement with PICI to acquire the latter’s business, comprised of its goodwill, receivables and all of the rights of PICI under the contracts for its business.
Over at JCY International Bhd, the hard disk maker saw its net profit increased 34% to RM51.15 million or 2.52 sen per share in the second quarter of financial year 2015 ended March 31, 2015 (2QFY15), compared to RM38.1 million or 1.88 sen per share in the previous corresponding quarter.
In a filing with Bursa Malaysia, JCY (fundamental: 2.1; valuation: 1.8) recorded a 7% increase in revenue to RM508.8 million in 2QFY15, compared to RM475.32 million in the second quarter of financial year 2014 (2QFY14).
On its outlook, the company said original design manufacturer (ODM) shipment numbers released in the second quarter continued to reveal softness in personal computer (PC) builds, with output down slightly compared with the shipment numbers in the previous financial quarter.
However, enterprise shipments are expected to recover in the second half of the year on increased demand from traditional storage or server vendors, as well as hyper-scale companies, the company said.
Meanwhile, can maker Kian Joo Can Factory Bhd’s net profit jumped 43% to RM28.3 million in the first quarter ended Mar 31, 2015, from RM19.8 million in the previous corresponding quarter.
Revenue rose 9% to RM345.9 million, from RM317.1 million previously.
Kian Joo said its operations in Malaysia and Vietnam are anticipated to remain challenging, due to stiff competition from players of the packaging industry.
Crane builder Favelle Favco Bhd announced that five of its subsidiaries have secured a total of nine purchase orders, worth a combined RM85.7 million.
In a filing with Bursa Malaysia, Favelle Favco (fundamental: 1.7; valuation: 2.4) said some of the contracts included delivering offshore crane and tower crane to oil and gas clients.
The group is expected to deliver the cranes to the respective customers between 2015 and 2016.
Higher loan impairment and overhead expenses have eroded Affin Holdings Bhd’s net profit by 79% to RM30.09 million or 1.55 sen per share for the first quarter ended March 31,2015, from RM142.73 million or 9.55 sen per share a year ago.
In a filing to Bursa Malaysian, Affin (fundamental: 1.1; valuation: 2.25 ) said the lower profit before tax was mainly due to higher allowance for loan impairment of RM130.4 million and higher overhead expenses of RM88.6 million.
This was despite the net of increase in other operating income and Islamic banking income of RM76.3 million of RM5.5 million, respectively.
However, Affin's 1QFY15 revenue increased to RM448.93 million, against RM317.09million last year — an increase of 20.97%.
Moving forward, the group expects its commercial banking sector to face stiff competition in the retail and fixed deposits market, against existing competitors, as well as players from the non-financial services sector.
CIMB Group Holdings Bhd, the country's second-biggest lender, saw its net profit plunged 45.6% to RM580.12 million or 6.89 sen per share in the first quarter ended March 31, 2105 (1QFY15), from RM1.07 billion or 13.15 sen per share a year ago, mainly due to higher corporate loan provisions from Indonesia.
Revenue for 1QFY15, however, rose 4% to RM3.68 billion, from RM3.54 billion in 1QFY14.
Going forward, CIMB group chief executive Tengku Datuk Zafrul Tengku Abdul Aziz said 2015 looks challenging and the group is remaining cautious, given the regional economic environment and the moderation in consumer spending in Malaysia.
“We will continue to focus on cost management and operational streamlining, at the same time continue to ensure core operations remain robust,” he said.
Kuala Lumpur Kepong Bhd (KLK)’s net profit shed 29% to RM222.5 million in the second quarter ended March 31, 2015, from RM314.6 million in the previous corresponding quarter.
Revenue, however, grew 4.5% to RM3.07 billion, from RM2.93 billion a year ago.
KLK declared an interim single tier dividend of 15 sen per share for the financial year ending Sept 30, 2015.
On prospects ahead, KLK said the global economy remains uncertain, amid the current low palm oil prices trading in a narrow range of RM2,150 per mt and RM2,250 per mt.
The group said its current financial year's plantation profit is expected to be lower than that of the previous financial year.
Batu Kawan Bhd’s net profit declined 26% to RM120.9 million in the second quarter ended Mar 31, 2015, from RM163.2 million in the previous corresponding quarter.
The group’s revenue, however, rose 4.5% to RM3.16 billion, from RM3.02 billion a year ago, as all segments reported higher revenues.
The group declared an interim single tier dividend of 15 sen per share for the financial year ending Sept 30, 2015.
On prospects ahead, Batu Kawan’s plantation profit for the current financial year is expected to be lower than last financial year’s, in view of the prevailing low palm oil prices.
Deleum Bhd’s net profit fell 15.6% to RM8.2 million in the first quarter ended March 31, 2015, from RM9.8 million in the previous corresponding quarter.
Revenue however, jumped 34% to RM135.9 million, from RM101.4 million previously.
In a statement, Deleum (fundamental: 1.7; valuation: 2.1) said the lower profit was due to lower contributions from its oilfield services segment and maintenance, repair and overhaul (MRO) segment.
(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.)