Top Glove, Mudajaya, Integrated Logistics, SCGM, Felda Global Ventures, Maxis, Scanwolf, Eco World and Lysaght

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KUALA LUMPUR (June 17): Based on corporate announcements and news flow on Wednesday, companies in focus on Thursday, June 18 are Top Glove, Mudajaya, Integrated Logistics, SCGM, Felda Global Ventures, Maxis, Scanwolf, Eco World and Lysaght.

Top Glove Corp Bhd recorded a 71% increase in net profit for its third quarter ended May 31, 2015 (3QFY15) at RM72.27 million, from RM42.37 million a year earlier, on higher sales volume amid a weaker ringgit against the US dollar.

In a filing with Bursa Malaysia, Top Glove (fundamental: 2.5; valuation: 1.3) said revenue rose to RM661.19 million, from RM574 million, as the export-based firm sells its gloves in US dollars.

Top Glove attributed its earnings growth to robust demand for both natural rubber and nitrile gloves.

For the nine-month period ended May 31, its accumulative net profit stood at RM177.03 million versus RM134.2 million a year earlier, while revenue increased to RM1.8 billion from RM1.7 billion.

Top Glove declared a dividend of eight sen per share for the quarter in review.

Mudajaya Group Bhd is mulling initiating legal action against a former employee in the recently uncovered irregular transactions involving one of its projects, which had led to additional costs incurred.

This follows the completion of an investigation by audit firm KPMG, which submitted its report to the Mudajaya's board of directors today, revealing that the irregular transactions were the conduct of a former employee, but there was no clear evidence of collaborated fraud.

However, the company said the investigation found evidence to suggest, on a prima facie basis, that there have been breaches of duties and obligations, as well as inappropriate conduct.

Meanwhile, the company has also expressed interest in acquiring the power assets belonging to debt-laden 1Malaysia Development Bhd (1MDB).

Mudajaya's group managing director and chief executive officer James Wong told reporters after the company’s annual general meeting (AGM) that it was keen on the option, if 1MDB were to approach the company and if the price was right.

However, Mudajaya is not involved in any discussion at the moment and 1MDB has not approached the company and vice versa, according to Wong.

Integrated Logistics Bhd (ILB) announced to Bursa Malaysia that it is acquiring Penang-based EVN Vision Sdn Bhd for RM2.52 million, a move to venture into solar energy business.

In a filing with Bursa Malaysia today, ILB (fundamental: 0.6; valuation: 1.8) said its wholly-owned unit IL Energy had entered into a share sale agreement with all three shareholders of EVN, to acquire 100% stake in the renewable energy firm.

ILB said the proposed acquisition will enable it to not only venture into the solar energy business, but also allow it to diversify its earnings base.

EVN's shareholders are Irene Martin (25%), Loh Cheng Keat (50%), and Datuk Loh Chiew Hor (25%).

EVN is principally involved in buying, selling, and installing green machinery, products and devices.

On Mar 27, EVN secured an approval from Sustainable Energy Development Authority Malaysia (SEDA) for setting up of up to 1MW of solar power plant at Seberang Perai Utara, Penang, to supply renewable energy to Tenaga Nasional Bhd for a 21-year term, according to the announcement.

Johor-based plastic product manufacturer SCGM Bhd announced its net profit for the fourth quarter ended April 30, 2015 (4QFY15) has doubled to RM5.14 million or 6.42 sen per share, from RM2.51 million or 3.14 sen per share, on better sales and foreign exchange gains.

In view of the improved profit margins, SCGM (fundamental: 3; valuation: 1.7) announced the first interim dividend of 5 sen per share for FY16. Going forward, SCGM said it has decided to pay dividend every quarter.

Quarterly revenue grew nearly 9% to RM25.87 million, from RM23.78 million a year ago, which SCGM said was due to an emerging trend, whereby traders are looking at developed countries — particularly the Asean market — for low cost quality producers to meet their flexible packaging needs.

For the full year ended April 30, 2015 (FY15), SCGM’s net profit jumped 36% to RM15.65 million or 19.57 sen per share, from RM11.49 million or 14.36 sen per share; while revenue increased 6.3% to RM106.63 million, from RM100.3 million a year ago.

Employees Provident Fund (EPF) has urged Felda Global Ventures Holdings Bhd (FGV) to explain why the plantation group is paying a hefty premium for proposed purchase of a non-controlling stake in Indonesia’s PT Eagle High Plantations Tbk.

EPF’s chief executive officer Datuk Shahril Ridza Ridzuan said “a lot more issues”, including the structure of the deal, were raised in FGV’s annual general meeting (AGM) on Tuesday (June 16).

“I think one of the things we (EPF) expressed are the concerns on valuation and in relation to the structure of the deal.

“But we are waiting for them (FGV) to formally notify the shareholders of the actual transaction when it comes to voting. I am pretty sure we raised a lot more than this issue. (We) hope to get more clarification on this issue,” Shahril said.

Shahril was speaking to the media after sitting as a panelist in a Bursa Malaysia-organised discussion on value proposition for environment, sustainability and governance investment.

He was commenting on FGV’s proposal to buy a 37% stake in PT Eagle High from controlling shareholder Rajawali Corp for about US$680 million (RM2.55 billion).

The purchase consideration would be settled by US$632 million cash, plus issue of 95 million new FGV shares.
The proposal has sent FGV's share price to a record low of RM1.65 on Monday. The stock closed at RM1.68 on Wednesday.

In addition, FGV (valuation: 2; fundamental: 1.15) proposed to also buy an equity interest of between 93.3% and 95% in Rajawali’s sugar project for US$67 million (RM251.3 million).

When asked if EPF would review its 5% shareholding in FGV, particularly at a time when the share price has been performing poorly, he instead replied that the provident fund has pulled out of several companies in the past.

Shahril pointed out that EPF has already reduced its stake in FGV to 5%, from about 10% at its peak, following the listing exercise in 2012.

Maxis Bhd, the country's largest mobile operator by subscribers, has proposed to set up a RM5 billion Islamic bond (sukuk) programme, with proceeds used for its capital expenditure and working capital and to refinance other debts.

In a filing with Bursa Malaysia, Maxis said the Securities Commission Malaysia (SC) has, vide its letter today, given its approval for the unrated sukuk programme, which will have a tenure of up to 30 years.

CIMB Investment Bank Bhd has been appointed as the sole principal adviser and lead arranger for the sukuk programme.

The yield to maturity will be determined prior to each issuance of sukuk, and the sukuk will be redeemed by the issuer at 100% of their nominal value on their respective maturity dates, Maxis said.  

Seven directors, including managing director Datuk Ch’ng Kong San, saw themselves removed from the board of Scanwolf Corp Bhd this afternoon, following the conclusion of its extraordinary general meeting (EGM).

Scanwolf co-founder and substantial shareholder Datuk Tan Sin Keat, who was the only board member to turn up at today's meeting, managed to retain his seat as executive director.

Meanwhile, five new candidates, who were nominated by three substantial shareholders of Scanwolf (fundamental: 0.55; valuation: 0.90), namely Yii Long Ging, Cedric Wong King Ti and Abdul Hamid Abdul Shukor, were successfully elected as its non-executive directors.

They are Abdul Hamid, Mua’amar Ghadafi Jamal Jamaludin, William Wong King Nguong, Ibrahim Saleh and Mohd Azizal Shubali.

All five new directors and three requisitionists had attended the EGM.

Scanwolf's board now consists of six members, with the position of managing director left vacant, following Ch'ng's defeat.
 
To recap, the three requisitionists had on May 14, mounted a bid to oust all the nine directors of the company, replacing them with five candidates in today’s EGM.

Eco World International Bhd (EWI), a special purpose entity set up by the major shareholders of Eco World Development Group Bhd to acquire real estate assets for development overseas, has withdrawn its plans to list as a special purpose acquisition company (SPAC) that was to raise RM1.5 billion from the exercise.

Instead, the property company is seeking a direct listing on Bursa Malaysia, looking to raise a higher sum of RM2 billion.

EWI would have been the country's first property SPAC.

EWI's executive vice-chairman Tan Sri Liew Kee Sin told a press conference on Eco World’s second-quarter financial results and EWI update on Wednesday, that it will file an initial public offering (IPO) application within the next three months, and is planning to list the company by the end of this year.

Liew also noted that the group's three developments in London, UK, namely London City Island, Embassy Gardens and Wardian London; as well as a commercial project in Sydney, Australia, will be injected into EWI.  

Meanwhile, Eco World Development Group Bhd reported a 286% jump in net profit to RM11.81 million in the second quarter, from RM3.06 million in the preceding first quarter. Revenue rose to RM417.82 million from RM158.03 million.

As Eco World (fundamental: 0.5; valuation: 0) has changed its financial year from September 30 to October 31, there were no comparative figures from a year earlier.

However, Eco World’s income statement had provided on-year comparative figures for the quarter ended March 31, as a reference.

According to the income statement, net profit for the quarter fell to RM2.57 million, from RM6.67 million a year earlier. Revenue fell to RM26.85 million, from RM33.54 million.

Eco World attributed the weaker financials to lower sales and revenue recognition from the group’s existing developments.

The firm also said it did not actively launch any sizeable new tracks at its Kota Masai project in Johor, as the developer was reviewing its master plan, which intends to create two separate and complementary developments adjacent to one another.

A shareholder of Lysaght Galvanized Steel Bhd has filed an application in the Kuala Lumpur High Court to adjourn the company’s 36th Annual General Meeting (AGM) scheduled for next Monday (June 22).

In a filing with Bursa Malaysia, Lysaght (fundamental: 1.95; valuation: 2.4) said shareholder Chan Sum Yoon had filed the application on various reasons, including the purported short notice of the AGM and notice of nomination for the election of directors.

Lysaght said its legal counsel will be filing a memorandum of appearance to act as solicitors for the company, and will be submitting an application to the High Court on Thursday (June 18), to convert Chan’s application into an opposed ex-parte application and “vindicate the company’s rights.”

In a separate filing, Lysaght revealed Chan had nominated Chua Tia Bon, board member of holding company Lysaght (Malaysia) Sdn Bhd, for director positions at the upcoming AGM.

In an explanatory letter filed with Bursa Malaysia today, Lysaght also said another shareholder, Karin Leong Wai Feung, had nominated Ee Beng Guan, former head of legal department at Lion Group, for the position as well.

(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.)