Monday, January 25, 2010

Pantech's 3Q net profit down 32% to RM11.7m

KUALA LUMPUR: Pipemaker PANTECH GROUP HOLDINGS BHD [] posted a 32% drop in net profit to RM11.7 million for its third quarter ended Nov 11, 2009 (3QFY10) from RM17.3 million a year earlier mainly due to lower sales volume from the trading division and lower output from manufacturing.

Revenue fell 30.6% to RM92.2 million from RM132.8 million, while basic earnings per share (EPS) dropped to 3.14 sen from 4.6 sen. It declared a special second interim single-tier dividend of 1.5 sen per share share versus eight sen per share a year earlier.

For the nine months to Nov 30, 2009, the group's net profit fell 21% to RM40.1 million from RM50.9 million a year earlier mainly due to lower contribution from the manufacturing division.

Revenue fell 9.8% to RM335.5 million from RM371.8 million. EPS fell to 10.71 sen from 13.57 sen while dividends declared rose to three sen from two sen in the same period in FY09.

On its prospects, Pantech said while there were signs of economic recovery, economic conditions continued to be challenging for the group.

“The board will continue its cautious approach undertaken to monitor, mitigate and respond to any negative economic headwinds through diligent administration of operational cost controls and cash flows.

“Barring any unforeseen circumstances, the board believes that the performance of the group for the current financial year will remain satisfactory while the long-term outlook of the oil and gas industry continues to be positive.”

Sunday, January 24, 2010

Bank of China to sell up to $5.8B in bonds

BEIJING (AP): Bank of China plans to sell up to 40 billion yuan ($5.8 billion) in bonds to replenish its capital and meet government standards following a record surge in lending last year amid Beijing's stimulus measures, a state-run news agency reported.

Regulators have warned some banks that they have fallen below minimum capital requirements after handing out some 9.5 trillion yuan in loans last year.

Banks are expected to scale back lending to roughly 7.5 trillion yuan in 2010.

Bank of China's proposal still requires shareholder approval at a meeting in March, the Xinhua News Agency said in its report late Saturday.

Approval is likely a formality because the government and state-linked institutions control a majority of the bank's shares.

China's banking industry is regarded as the healthiest of any major economy because institutions avoided the mortgage-related turmoil that battered Western lenders.

Beijing hopes cooling the pace of lending will keep its economy growing without creating inflation and overheating.

Other nations are counting on that growth and a healthy demand from China for their goods for their own recoveries.

Record bank lending in 2009 to support government spending on infrastructure and other projects under Beijing's stimulus package has led to fears of asset bubbles and huge bank losses if too many loans sour.

Stocks to watch: Axiata, Kencana, DRB-Hicom, Ho Hup

KUALA LUMPUR: Regional markets will continue to see volatile trade on Monday, Jan 25 with more downside pressure after US stocks fell for the third day, the worst in 10 months, on Friday.

Investors worried White House's plan to curb bank risk-taking would cut profits, and tech shares slumped after Google Inc's disappointing results.

Reuters said uncertainty about the Senate's confirmation of Ben Bernanke for another term as the Federal Reserve's chairman also rattled investors in a week when political squabbles helped erase stocks' gains for 2010, according to Reuters.

The Dow Jones industrial average fell dropped 2.09% to 10,172.98, the Standard & Poor's 500 Index skidded or 2.21% to 1,091.76. The Nasdaq Composite Index fell 2.67% to 2,205.29.

At Bursa Malaysia, the FBM KLCI which fell below the psychological important 1,300 level may extend its losses this week, with banks, PLANTATION []s and latex glove makers the major decliners as investors lock in gains.

Again investors should see the selling of fundamentally strong stocks as buying opportunity to pick up these counters. The improvements in the economic outlook and corporate earnings should again spur buying interest.

Stocks to watch include Axiata Group Bhd, KENCANA PETROLEUM BHD [], DRB-HICOM BHD [], Yeo Hiap Seng (Malaysia) Bhd, Ho Hup CONSTRUCTION [] Co. Bhd, Rubberex Corp (M) Bhd and SAPURACREST PETROLEUM BHD [].

CIMB Equities Research is maintaining its Outperform recommendation on Axiata with an unchanged sum-of-parts based target price of RM3.86, of which 4% comes from Idea.

“We still rate Axiata as our top pick among the regional telcos given the strong growth at Celcom and Excelcomindo. Both continue to gain market share in their respective countries and the strengthening rupiah also favours Axiata.

“The likely re-rating catalysts include positive earnings surprises, especially at Celcom and XL, and market share gains at its key units. Our EPS forecasts are 15-36% above consensus. The key risks are the upcoming 3G spectrum auction and price war in India,” it said.

As for Kencana, CIMB Research is maintaining an Outperform and raised the target price to RM2. New ventures including pipeline installation and drilling) and new contracts (Malaysia and India) further fuels the research house’s optimism on Kencana.

Bahrain’s Al Baraka is in preliminary discussions to buy a stake in Bank Muamalat and it could be up to 49%. DRB-Hicom Bhd owns 70% of Bank Muamalat while Khazanah Nasional owns the remaining 30%.

Yeo Hiap Seng said the revenue from contributed by "Red Bull" products for the financial period Oct 1, 2008 to Sept 30, 2009 was RM99.6 million, accounting for 18.2% of the group revenue.

The operating profit was RM870,000, or 14.7% of the group's operating profit during that financial period, it said in its comments on the financial impact on the cessation of the contract to distribute the products.

Ho Hup, which has earlier targeted to submit its revised regularisation scheme on Feb 4, has sought a three-month extension to May 4 to address its Practice Note 17 status.

It revised the capital reduction to 60 sen of the par value, instead of the 95 sen earlier while it wants to leverage on the company’s current core land bank of 60 acres within Bukit Jalil.

Rubberex’s net profit for FY ended Dec 31, 2009 nearly doubled to RM16.56 million from RM8.63 million a year ago. Revenue was RM325.44 million compared with RM274.51 million.

SapuraCrest Petroleum's JV has secured a US$75 million contract to transport and install four platform jackets in the Mumbai High North Field, offshore Mumbai. SapuraCrest’s share will be 60% of the contract based on its shareholding in the JV.

CBS Tech’s bonus issue of one-for-two shares and Hunza PROPERTIES [] rights issue with warrants will go ex on Jan 25.

Thursday, January 7, 2010

Ho Hup board to meet over removal of MD plan

MD unsure about motive to remove him and other board members

PETALING JAYA: The board of directors of Ho Hup Construction Co Bhd will fix a meeting to discuss the intention of Low Chee & Sons Sdn Bhd and Choo Soo Har to call a special meeting for the removal of the current board and appointment of a new one.

Low Chee & Sons and Choo are substantial shareholders in the company. They had, on Tuesday, announced to Bursa Malaysia their intention to call for an EGM on Feb 4 for the removal of seven members of the board and appointment of six others.

Ho Hup group managing director Lim Ching Choy told StarBiz that he was unsure about the motive for the removal of the members of the board, which included himself and deputy executive chairman Datuk Vincent Lye Ek Seang, also a major shareholder.
»We’re going to have a board meeting to discuss the matter but we haven’t fixed the date yet« LIM CHING CHOY

“We’re going to have a board meeting to discuss the matter but we haven’t fixed the date yet,” he said.

Lawyers representing Low Chee & Sons and Choo were unable to comment on the matter when contacted.

This adds another twist to the ongoing tussle at Ho Hup, where Datuk Low Tuck Choy, one of three owners of Low Chee & Sons, had opposed the sale of two parcels of land held by Ho Hup and approved by the board headed by Lye on the basis that these were being sold at below market rates.

Low, a former Ho Hup managing director, is also a son of the late Low Chee, the company’s founder.

In an anti-climatic EGM on Dec 30 that news reports had predicted would be fiery, the resolutions to sell the two parcels were passed with both Lye and Low represented by their lawyers.

Ho Hup, an affected issuer under Bursa Malaysia’s amended Practice Note 17, saw its share price rise 164.17% from the most recent low of 33.5 sen on Nov 2 to end last year at 88.5 sen.

The stock has risen another 42.14% since Jan 4 to close at RM1.99 yesterday.

The company had also announced to Bursa that the board, which met Monday, had not come to a decision yet on a possible exercise to raise funds for immediate operational requirements pending the regularisation plans, which included a proposed 95% capital reduction and proposed new share placement exercise.

Tanjung Offshore wins Petronas job

PETALING JAYA: Tanjung Offshore Bhd has been awarded long-term charter contracts, estimated to be worth RM150mil, by Petronas Carigali Sdn Bhd for its anchor-handling tug and supply vessels (AHTS).

In a filing with Bursa Malaysia, Tanjung said the tenures of the contracts were between three years and six years and were expected to commence in March.

It said the three AHTS vessels were expected to be utilised to support the offshore operations of Petronas in Malaysian waters during the tenure of the contracts.

“With these new vessel deliveries, Tanjung will be operating 14 offshore support vessels effective March 2010,” it said.