Highlights

HLBank Research Highlights

Author: HLInvest   |   Latest post: Mon, 21 Oct 2019, 5:46 PM

 

Breakfast Brief

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NEWSBRIEF

Sunway City Buys Sterling Paradise for RM15m

Sunway City (wholly-owned subsidiary of Sunway Berhad) is buying Sterling Paradise for a consideration of RM15m which comes with the rights to 47 parcels of land measuring c.11.8acres (514k sqft) of freehold land in Mutiara Bukit Jalil. It said on Friday it had signed an agreement to acquire 100% of Sterling Paradise which owns the 47 parcels of land with a potential residential-led mixed-use scheme. Sunway pointed out Sterling Paradise had secured the lands on relatively favourable terms at a purchase consideration of 15% of the gross development value (GDV) of the future development less a fixed sum of RM36.7m. (NST)

Comment: The proposed mixed development (est. GDV RM800m) is targeted to launch in 2H20 with a 6 year development period. Based on a 18% PBT margin (mid-point of management’s guided PBT margin of 15-20%), the effective NPV of the project is estimated at RM59.9m or 0.6% of the estimated RNAV for the property segment. Net gearing expected to remain unchanged at 0.36x (as at 2Q19). Our forecasts remain unchanged as the expected GDV and sales contribution from this project is within our GDV launch and sales assumption over our forecast horizon. We maintain our BUY call with an unchanged TP of RM2.17 based on a 10% holding discount from SOP-derived valuation of RM2.41.

Pahang to Receive Investments Worth RM1.4bn From China

Pahang will be getting RM1.4bn of investments from China via a Memorandum of Understanding (MoU) signed with six companies from the country. Among the companies are ND Paper (M) Bhd which will build a factory in Bentong worth RM522.2m to produce paper and pulp and an RM200m investment by China Travel Service Meizian Company Limited to create an 'eco tourism city' in Bukit Tinggi. (The Edge)

Ambank Launches Programme to Help SMEs Digitise and Grow

AMMB Holdings Bhd (AmBank) has launched AmBank BizM.A.T.E., a programme which involves collaborations with partners from various disciplines, to provide products and services relevant to the SMEs. (The Edge)

MAA Acquires Education Business for RM27m

Loss-making MAA Group Bhd has proposed to buy a 90% equity interest in Scholastic IB International Sdn Bhd (SIB) for RM27m in cash. The vendors are Scholastic Ventures Sdn Bhd and PAC Edu KL Sdn Bhd, which hold 51% and 39% stakes in SIB. The remaining 10% stake is owned by the Johannians Leadership Foundation. (The Edge)

Poh Huat 3Q earnings up 22% as furniture orders shift to Southeast Asia exporters amid trade war

Poh Huat Resources Holdings Bhd saw its third quarter net profit rise 22.5% to RM11.3m from RM9.2m a year ago, thanks to an increase in shipment of furniture from both its Malaysia and Vietnam operations as the US-China trade war resulted in orders moving from China to Southeast Asia. Earnings per share for the quarter ended July 31, rose to 5.09 sen from 4.19 sen previously. The group has declared a second interim dividend of two sen per share, payable on Nov 14. (The Edge)

Willowglen gets RM13.8m job from S'pore firm to maintain surveillance system

Willowglen MSC Bhd has been awarded a contract worth RM13.8m to provide maintenance for an Integrated Security and Operation Surveillance System to SP PowerAssets Ltd, a Singapore company. In a filing to Bursa Malaysia, Willowglen said its wholly-owned subsidiary Willowglen Services Pte Ltd had secured the contract, which commences on Oct 1 and is scheduled to complete by Sept 30, 2022. The contract is not renewable. (The Edge)

Unisem Postpones Batam Plant Closure to March 2020

Unisem (M) Bhd has extended the planned closure of its plant in Batam, Indonesia to March 2020, instead of Sept 30 this year, to service last time orders for some customers. (The Edge)

PetGas Is Geared Up for Liberalised Market, Says Petronas

Petroliam Nasional Bhd (Petronas) said it is all for the liberalisation of the market, given the government's upcoming reforms for the power sector, and pointed out that Petronas Gas Bhd (PetGas) has already taken the necessary steps over the past few years to prepare itself to compete in an open market. (The Edge)

UEM Group: Part of proceeds from Cipali toll sale for infrastructure, other Indonesian investments

UEM Group Bhd, a wholly-owned subsidiary of Khazanah Nasional Bhd, said part of the proceeds from the disposal of its subsidiary's stake in the operator of the 117km-long Cikopo-Palimanan (Cipali) toll road will be invested into Malaysia's key national infrastructure and other opportunities in Indonesia. (The Edge)

KNM Subsidiary Gets USD5.4m Contract From Samsung Consortium

KNM Group Bhd's indirect wholly-owned subsidiary FBM-KNM FZCO has secured a USD5.4m (about RM22.4m) contract to supply shell and tube heat exchangers to an oil refinery run by Thai Oil Public Co Ltd in Thailand's Sri Racha district within the province of Chonburi. KNM Group said FBM-KNM FZCO had today accepted the purchase order (PO) dated yesterday (Sept 19) from PSS Netherlands B.V. Sharjah Branch for clean fuel project at oil refinery. (The Edge)

Syed Mokhtar buys another 8% of Media Prima from Umno’s Altima — sources

Tycoon Tan Sri Syed Mokhtar Al-Bukhary is believed to have bought another 7.9% of Media Prima Bhd through direct business transactions yesterday from Umno linked Altima Inc, raising his ownership in the media group to more than 31%. By selling the balance 7.9%, Altima appears to have disposed of all its interest in Media Prima. (The Edge)

YTL Communications to Expand Terragraph Network

YTL Power International Bhd’s 60%-owned YTL Communications Sdn Bhd (YES) is eyeing the deployment of its 5G-ready Terragraph network in more cities in Malaysia, following the success of its pilot project in George Town, Penang. (The Edge)

Foundpac Expects Strong Growth

Foundpac Group Bhd expects its first-half performance for the financial year ending June 30, 2020 (FY20) to improve by a double-digit percentage over that of the same period a year ago, driven by the implementation of 5G infrastructure and transmission towers. Group chief executive officer Ong Choon Heng told Starbiz that for the first half of FY20, more than RM25m worth of test sockets, stiffeners and laser stencils would be shipped to semiconductor test equipment customers in the United States, Europe and China, compared to about RM21m achieved in the corresponding period of the preceding year. (StarBiz)

HSL and Firms Win RM138m Jobs in Score

Hock Seng Lee Bhd (HSL) and five other companies have been awarded infrastructure projects worth about Rm138m in the Sarawak Corridor of Renewable Energy’s (Score) extended boundary area in central region. The fast-track projects represent the first phase of an entire 34 projects planned by the Upper Rajang Development Agency (URDA). It oversees a development area of 41,000 sq km and covering the riverine towns of Kapit, Kanowit, Song, Belaga and Bukit Mabong. The Upper Rajang Basin is home to the 2,400MW Bakun hydroelectric dam, 944MW Murum dam and the 1,285MW Baleh dam project currently under construction. The Sarawak government has allocated RM1.5bn to fund the projects that would improve road connectivity in the URDA area to facilitate the opening up of large tracts of land for economic trigger projects. (StarBiz)

CIMB Signs UN Principles for Responsible Banking

CIMB Group Holdings Bhd has joined a coalition of 130 banks worldwide, representing over USD47 trillion in assets, to be one of the founding signatories of the Principles for Responsible Banking. The second-largest banking group in Malaysia said in a statement yesterday that as a signatory of the Principles for Responsible Banking, it would commit to strategically align its business with the United Nation’s (UN) Sustainable Development Goals and the Paris Agreement on Climate Change. Commenting on the group’s involvement in the Un-backed framework, CIMB group CEO Tengku Datuk Seri Zafrul Aziz said: “As a founding member of the UNEP-FI (United Nations Environment Programme-finance Iniative) Principles for Responsible Banking, we are convinced that only in an inclusive society, founded on human dignity, equality and the sustainable use of natural resources, can our employees, customers and other stakeholders thrive.” (StarBiz)

Saudi Attacks Fail to Dampen Eversendai’s Enthusiasm

Eversendai Corp Bhd, which has an outstanding order book of RM2.4bn, has tendered for new Saudi Aramco projects despite the recent drone attacks on oil facilities in Saudi Arabia. Executive chairman and group managing director Tan Sri A K Nathan told Starbiz that the group is still keen on the energy giant’s projects.. “Currently, our tender book for Saudi Aramco projects is about USD100m. We have ongoing infrastructure construction projects in the kingdom. (StarBiz)

ECONOMICS

Eurozone

The European Commission’s consumer confidence index improved to -6.5 in Sep (Aug: -7.1; est: -7.0). (Bloomberg)

Japan

CPI slowed to +0.3% YoY in Aug (Jul: +0.5% YoY), matching expectations. The core index held at +0.6% YoY (Jul: +0.6% YoY; est: +0.5% YoY). (Bloomberg)

Source: Hong Leong Investment Bank Research - 23 Sept 2019

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