Pesona Metro, UP, Borneo Oil, TNB, Masteel, REDtone, BCorp, Sasbadi and Amanah Harta Tanah PNB

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KUALA LUMPUR (April 27): Based on corporate announcements and newsflows today, the companies that may be in focus tomorrow (Tuesday, April 28) could include: Pesona Metro, United Plantations (UP), Borneo Oil, TNB, Masteel, REDtone, BCorp, Sasbadi, and Amanah Harta Tanah PNB.

Construction firm Pesona Metro Holdings Bhd is planning to acquire a 90% equity interest in Selasih Asli Sdn Bhd (SASB) for RM60 million.

SASB is the potential concessionaire for the development and maintenance of student hostels in Peninsula Malaysia and was set up for the purpose of entering into a concession agreement with relevant authorities for the design, development and maintenance of student hostels at a tertiary level institution.

In a filing with Bursa Malaysia, Pesona Metro (fundamental: 1.8; valuation 0.5) said Semarak Korporat Sdn Bhd (SKSB), who is SASB’s parent company, is in the midst of negotiating with relevant parties for SASB to enter into a concession agreement, the details of which will be announced once the agreement is signed.

Pesona Metro said the purchase consideration would be satisfied with RM3 million in cash, and the remainder with the allotment of and issuance of new Pesona Metro shares to be determined later.

United Plantations Bhd (UP) saw its net profit decline 30.43% to RM61.15 million in the first quarter for financial year ending Dec 31, 2015 (1QFY15), compared to RM87.75 million in the previous corresponding quarter, due to lower prices of crude palm oil (CPO) and palm kernel (PK), and higher production costs.

UP (fundamental: 1.95; valuation: 1.7) also saw its 1QFY15 revenue dip 10.39% to RM233.92 million, compared to RM261.03 million in the previous corresponding quarter.

UP said the plantations’ segment profit before tax for the quarter decreased by 6.1% on-year, due to the significantly lower CPO and somewhat lower PK prices, as well as higher costs of production for these two products.

As for its refinery segment, UP said it suffered a 57.3% drop in 1QFY15, as compared to the previous corresponding quarter, mainly due to a fair valuation of forward foreign exchange hedging position.

Sabah-based fast food operator and energy outfit Borneo Oil Bhd (fundamental: 1.65; valuation: 0.5) has proposed a 1-for-6 renounceable rights issue of up to 2.374 billion shares at an indicative issue price of 10 sen per share, together with 1-for-2 free detachable warrants (warrants C) of up to 1.187 billion warrants, at an entitlement date to be determined later.

In a filing with Bursa Malaysia this evening, Borneo oil said it intends to raise a minimum gross proceeds of RM223.39 million, the bulk of which will be channelled into the exploration of gold and limestone mining activities, working capital for fast food operations, future investments and repayment of bank borrowings.

The issuance of the rights issue and free warrants is expected to enlarge Borneo Oil’s issued and paid-up capital to 3.956 billion shares, from 372.319 million shares currently.

Tenaga Nasional Bhd (TNB) saw its net profit for the second financial quarter ended Feb 28, 2015 (2QFY15) rise 24.4% to RM2.16 billion, from RM1.73 billion a year ago, on lower generation costs, due to lower coal price and lower usage of the more expensive liquefied natural gas (LNG) fuel.

Revenue for 2QFY15 rose 6.1% to RM10.61 billion, from RM10 billion in 2QFY14, mainly due to higher sales of electricity in Peninsular Malaysia and Sabah, which recorded an increase of 12.6% and 14.2% respectively, due to a hike in the average electricity tariff.

For the six months period ended Feb 28, 2015 (1HFY15), TNB (fundamental: 1.3;valuation: 1.8) recorded a net profit of RM4.51 billion, which was 29.4% higher than 1HFY14 net profit of RM3.48 billion, mainly due to increased revenue and a decrease in operating expenses.

Revenue for 1HFY15 rose 9.2% to RM21.64 billion, from RM19.57 billion a year ago, which was the result of the improvement in sales of electricity in Peninsular Malaysia and Sabah, by 15.8% and 17.4% respectively.

However, the imbalance cost past through (ICPT) process has yet to be automatically effected. When fully effected, the group results will need to reflect the over-recovery amounting to approximately RM1.5 billion (net of tax), which is subject to final confirmation.

The ICPT is a mechanism under the incentive based regulation (IBR) framework, allowing TNB as the national utility to reflect changes (either an increase or reduction) of the fuel and other generation costs in the electricity tariff every six months.

Malaysia Steel Works KL Bhd (Masteel) — which manufactures and sells high-tensile steel bars, mild steel bars and prime steel billets — announced the issuance of its audited financial statements for the financial year ended Dec 31, 2014 (FY14), together with its auditors’ and director’s reports (AFS 2014), will be delayed.

In a filing with Bursa Malaysia this evening, Masteel (fundamental: 0.35; valuation: 1.4) said its external auditor requires more information to complete its audit.

“The company wishes to provide more time for the external auditors to complete the auditors’ and directors’ report,” the group said in a filing, adding it is working to finalise the audit expeditiously.

“The company expects its AFS 2014 on or before May 11, 2015, although the company is working towards the deadline on April 30, 2015,” it said.  

According to Rule 9.32(2) of Bursa Malaysia’s Main Market Listing Requirements, a listed company is required to furnish the annual audited financial statement, together with the auditors’ and directors’ report, within four months from the close of its financial year.

Masteel noted that the stock exchange regulator may suspend or de-list the trading of its shares, if it continued to delay the submission AFS 2014 beyond the stipulated timeframe.

Masteel’s FY14 reported a 41.5% plunge in net profit to RM15.8 million, from RM27.01 million in FY13, despite a 5.6% growth in revenue to RM1.45 billion, from RM1.37 billion previously.

Berjaya Corp Bhd (BCorp)’s takeover offer for telecommunication player REDtone International Bhd at 80 sen per share is deemed “fair and reasonable”, according to independent adviser to REDtone shareholders, Mercury Securities Sdn Bhd.

Meanwhile, REDtone’s managing director Datuk Wei Chuan Beng, group chief executive officer Lau Bik Soon, senior executive director Datuk Ismail Osman, independent non-executive directors Datuk Mohd Zaini Hassan and Avinderjit Singh, as well as non-independent non-executive director Datuk Lye Ek Sang, have also agreed the offer is fair and reasonable and have advised shareholders to accept the offer.

However, non-interested directors Matthew Thomas Vargis Matthews and Jagdish Singh Dhaliwal have recommended shareholders reject the offer price, as it is low after taking into consideration the long-term growth potential and prospects of the group, as well as future projects which may be secured by REDtone.

BCorp (fundamental: 0.9; valuation: 2) had on March 27 acquired a 10.53% stake in REDtone (fundamental: 2.3; valuation: 0.5) via its wholly-owned vehicle Juara Sejati Sdn Bhd, bringing its shareholding, coupled with persons acting in concert (PACs) to 35.84%, which triggered the mandatory general offer threshold.

The PACs include Vincent Tan, Berjaya Philippines Inc, Prime Credit Leasing Sdn Bhd, and Sia Git Kim.

Book publisher Sasbadi Holdings Bhd posted a net profit of RM8.34 million or 6.56 sen per share in the second quarter ended Feb 28, 2015 (2QFY15), on revenue of RM32.11 million.

Sasbadi said it could not provide comparative figures, as it was only listed on July 23, 2014. The initial public offering had raised for it RM25.228 million.

For the cumulative six months ended Feb 28, 2015 (6MFY15), Sasbadi reported a net profit of RM9.98 million or 7.86 sen per share, on revenue of RM48.44 million.

Going forward, Sasbadi said it will focus on expanding its conventional publishing business, which it expects to experience organic growth from new products that will be launched during financial year ending Aug 31, 2015 (FY15).

It will also look for growth through suitable acquisitions within the industry.

Amanah Harta Tanah PNB (AHP) is acquiring a 13.39 acre piece of land in Seremban, with a three-storey mall cum hypermarket and two sub-basements, for RM240 million from Mydin Mohamed Holdings Bhd.

Based on a filing with Bursa Malaysia, the acquisition has been made by AmanahRaya Trustees Bhd on AHP’s behalf. AHP (fundamental: 1.5; valuation: 1.55) is a real estate investment trust managed by Pelaburan Hartanah Nasional Bhd (the manager).

As part of the agreement, AHP will lease the property back to Mydin for an initial period of 30 years, for a pre-agreed rental sum over 10 term periods.

The rental sum will increase every term, starting at RM1.4 million a month for Term 1 or the first four years, and will escalate to RM3.3 million a month at Term 10 or the 30th year of the lease. There is also an option to renew the lease, after the 30-year period.

The manager has also proposed to undertake a fundraising exercise through the issuance of 120 million rights units, on the basis of six rights units for every five existing units in AHP, to raise gross proceeds of RM129.6 million. The issue price of the rights units will be fixed at a later date.

Of the proceeds, RM115 million will be used to fund the acquisition. The remainder acquisition consideration will be satisfied through bank borrowings of RM125 million.

The proposals, subject to approval of AHP unit holders, are expected to be completed by the third quarter of 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.)