LTKM, Guocoland, Texchem, Kretam, Kanger, Maybank and MRCB



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KUALA LUMPUR (April 7): Based on corporate announcements and newsflow today, stocks in focus tomorrow (Wednesday, April 8) could include: LTKM, Guocoland (M), Texchem Resources, Kretam Holdings, Kanger International, Malayan Banking (Maybank) and Malaysian Resources Corp Bhd (MRCB).

Poultry farming company LTKM Bhd announced a series of corporate proposals today: a 1-for-2 bonus issue, a 1-for-2 share-split and the setting-up of an employee’s share option scheme (ESOS).

On the proposed bonus issue, LTKM (fundamental: 3; valuation: 2.4) said it will issue 21.68 million bonus shares of RM1 each at an entitlement date to be determined later, which will increase its issued and paid-up capital to 65.05 million shares or RM65.05 million, from 43.37 million shares or RM43.37 million shares currently.

Subsequent to the bonus issue, LTKM proposed to undertake a 1-for-2 share split (each RM1 existing share to be split into two ordinary 50 sen shares) — also on an entitlement date to be fixed later — that will up its share capital to 130.1 million shares, from 65.02 million shares earlier, while maintaining the paid-up capital at RM65.05 million.

LTKM has also proposed to establish an ESOS of up to 10% of its issued and paid-up capital which will be offered to its eligible employees, directors — including its non-executive directors, and subsidiaries.

LTKM expects to complete the series of corporate proposals by the second half of 2015 (2H15).

Guocoland (M) Bhd saw its net profit for the third quarter ended March 31, 2015 (3QFY15) fallen 25.97% to RM11.63 million, from RM15.71 million a year ago, due to lower contribution from its commercial property development business and joint venture projects.

Revenue meanwhile declined by 9.7% to RM52.75 million, from RM58.44 million previously, which the group said was mitigated by higher contribution from the residential development sub-segment.

For the cumulative nine months (9MFY15), Guocoland's (fundamental: 1.3; valuation: 2.4) net profit fell 57.39% to RM17.43 million or 2.6 sen per share, from RM40.91 million or 6.11 sen per share. Nine months revenue retreated by 23.54% to RM136.55 million, versus RM178.59 million a year ago.

Guocoland said it expects the property market outlook and sentiment to remain cautious, amid credit tightening rules and uncertain economic environment.   

Plastics packaging and industrial chemicals producer Texchem Resources Bhd is seeking a three-month extension from the Singapore Stock Exchange (SGX) to submit its reasonable exit offer proposal, following the delisting notification issued to its 70.48%-owned Singapore-listed subsidiary Texchem-Pack Holdings (S) Ltd last year.

Texchem (fundamental: 0.4; valuation: 2) told Bursa Malaysia it would not be able to meet the deadline to submit the proposal to the SGX, which falls on April 7 (today).   

This is not the first time Texchem is seeking an extension for the exit offer proposal submission. The SGX had originally given Texchem-Pack one month from the date of the delisting notification on March 5 last year, to make an exit offer proposal.

Today, Texchem said it is still preparing the exit offer to be issued to Texchem-Pack's shareholders. It said Texchem-Pack is also currently in the process of appointing a valuer and independent financial adviser who will require a valuation report, before they can put forward their report to Texchem-Pack.

To recap, Texchem-Pack received the delisting notification after it failed to rejuvenate its financials within the time frame specified by the bourse regulator.

Sabah-based plantation player Kretam Holdings Bhd announced that its subsidiary Usaha Dimega Sdn Bhd has extended the cut-off date to fulfil all the conditions precedent in the bulking joint-venture agreement (BJVA) that the latter inked with Rikaworth Sdn Bhd.

“The board of directors wishes to announce that Rikaworth and Usaha Dimega have mutually agreed in writing to extend the cut-off date of the BJVA for another three months to expire on July 7, 2015 (or such other date as may be further agreed in writing), to fulfil all the conditions precedent in the BJVA,” Kretam (fundamental: 1.25; valuation: 1.4) said in a filing with Bursa Malaysia this evening.

This is the second extension of the BJVA. The first extension — up to March this year — was announced on Jan 7, 2015.

To recap, Usaha Dimega signed the conditional BJVA with Rikaworth on July 7, 2014, to venture into the business of palm oil common bulking installations for palm oil and related products.

The deal was originally supposed to be completed six months after the signing of the BJVA, pending the fulfilment of the conditions precedent.

China-based bamboo flooring manufacturer Kanger International Bhd saw its managing director Leng Xingmin dispose of 20 million shares or a 3.88% stake to an institutional fund at 45 sen apiece or RM9 million in total.

In a filing with Bursa Malaysia today, the group said the transaction was done yesterday (Monday, April 6), but did not disclose the buyer of these shares.

When contacted, Kanger’s executive director Amita Chong said the shares were sold to an institutional fund. However, he was not certain about the name of the fund.

“What I know is that they are not interested to own more than a 5% stake in Kanger, and they are not asking for more,” he told when contacted by telephone.

The price was 11% higher than Kanger’s closing price of 40.5 sen yesterday (April 6). After the transaction, Leng’s shareholding was reduced to 40.19%, which is equivalent to 207.35 million shares.

Malayan Banking Bhd (Maybank) will be opening its fourth branch in Greater China in Kunming, Yunnan, making it the first Malaysian bank to set foot in the province.

Maybank (fundamental: 1.5; valuation: 1.45) chairman Tan Sri Megat Zaharuddin Megat Mohd Nor said the bank is banking on the potential of China and the strategic position of the Yunnan province as a gateway to South Asia and ASEAN.

He was speaking to reporters, after Maybank’s 55th annual general meeting (AGM) today.

He said the group sees China as a key driver for the global economy, especially for ASEAN economies, noting bilateral trade between ASEAN and China grew five-fold to US$444 billion, from US$78 billion in the five-year period up to 2013.

Malaysian Resources Corp Bhd (MRCB) is acquiring the German Embassy land in Kuala Lumpur for RM259.16 million.

According to MRCB's (fundamental: 0.9; valuation: 0.9) filing with Bursa Malaysia today, the purchase of the 1.8661 acres (0.76 ha) freehold tract along Jalan Kia Peng would help MRCB grow its property development operations.

The land's price at RM259.16 million or RM3,188 per square foot is about 6% higher than the market value of the land, based on an appraisal by CH Williams Talhar & Wong and Raine & Horne International Zaki & Partners, according to MRCB.

MRCB said it had today signed the sale and purchase agreement (SPA) with the German government. MRCB said it would finance the acquisition via bank borrowings and/or internally-generated funds.

(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.)