probability

Malaysian Unity plan to sell underperforming assets, concentrated firepower attack energy and growing business, kennage research series as early as 2019 is expected to be effective.



(25th in Kuala Lumpur) Malaysian Unity (KUB,6874, Board trade group) intends to sell underperforming assets, concentrated firepower attack energy and growing business, kennage research series as early as 2019 is expected to be effective.


According to the kennage study, the company diversified, by 2016 in the first 3 quarters of sales performance, energy industry 63%, the technology industry accounted for 19%, agricultural 8%, food 9%, and the remaining 5% for other businesses.


The company's information and communications technology (ICT) business recorded the highest growth, 24% 3-year compound average growth rate (CAGR), energy and grow business at 6% and 2% respectively.


The Bank believes that the company's technology operations for 76.6 million ringgit in order not to fulfil, so that material can be for 2016 and 2017 respectively contributed 9.7 million in the fiscal year to 10.4 million ringgit in pre-tax profit.


The energy business, the Bank estimated, when crude prices if productivity continues to grow, the company can lower LPG prices, thereby enhancing the earn site, predicted that business can be in 2016 and 2017, with 22.8 million in the fiscal year to 25.8 million ringgit profit.


According to 2015 annual report referred to in the company's energy business partnership program, as well as the return on assets over the past 3 years 8%, which speculated that productivity and assets are expected to rise, which reached 211 million ringgit.


The Bank believes that the company's energy business net profit expected to yield an additional 5.5 million ringgit a year, or equivalent to 27% the 2015 fiscal year revenue growth.



Plant operations, the Bank's bullish on raw palm oil prices rebound, as well as the new Palm oil factory will be put into operation this year and has forecast a recovery in its business in fiscal year 2016 and 2017, up to 5.3 million ringgit and 9.1 million ringgit respectively.


The Bank's forecast, the company is expected to be 160 million ringgit of capital expenditures, of which between 50 million and 60 million Ringgit for the acquisition of up to 2500 hectares of land to meet expansion plans to increase production.


Previously, the company sold 3.7 million ringgit off Thailand A&W fast-food chain business and sold its 19 million ringgit--KUB Precast precast concrete floor arms Pte Ltd, the Bank pointed out that these divestment activity will allow management to focus more on core business operations.


KUB owns a total of 12.6 million, million book value of the assets, located in Perak, Kelantan, Selangor and Johor, the market value of 30 million ringgit.


Gains on sale of assets not sufficient dividends


However, despite the gains on sale of these assets, 60% pushed the company's net cash, to 80 million ringgit, the Bank believes that the cash will be used for expansion plans, therefore does not consider divestment activity may increase interest rates the company.


Overall, kennage thought, mainly driven by higher energy and growing business making picture, which reached 10zhi16% in 2016 and 2017, the fiscal year of the company earnings growth, rose to 20.5 million to 23.8 million ringgit.


The Bank pointed out that, look at the start of the year's expansion plans, benefits can only be reflected in as early as 2019. Although the Bank does not give uniform ratings, but think its a reasonable price of 45 cents.

2017-02-02 02:08