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Saturday, February 28, 2015

Heng Huat: Slowly But Surely? - Bursa Dummy

Friday, 27 February 2015 
HHGroup FY14Q4 Financial Result
HHG (RM mil)FY14Q4FY14Q3FY14Q2FY14Q1FY13Q4
Gross Profit8.810.410.49.79.5
Biomass Rev18.118.619.716.718.2
Mattress Rev9.
Biomass OP3.
Mattress OP-0.1-0.1-
Total Equity68.364.843.140.437.3
Total Assets109.8110.595.390.589.0
Trade Receivables22.319.721.419.219.4
Total Liabilities36.842.24947.449.1
Trade Payables11.
ST Borrowings9.612.115.515.313.8
LT Borrowings15.319.020.521.423.0
Net Cash Flow13.
D/E Ratio0.140.190.770.850.95
Heng Huat's revenue in FY14Q4 is rather flat. Gross profit margin drops due to higher raw material price for biomass segment but lower admin & distribution expenses make the PBT comparable to previous quarters.
Excluding the listing expense of RM1.87mil in Q3, FY14Q3 PBT is actually RM4.2mil. So current Q4 PBT of RM3.5mil is a bit of disappointment to me.
Tax income registered in Q4 gives Heng Huat its record high quarterly PATAMI of RM3.4mil.
HHG (RM mil)FY14FY13
Revenue growth %24.6 
Gross Profit39.232.0
PATAMI growth %7.2 
Anyway, full year FY14 result is still commendable with revenue grows 24.6% and PATAMI grows 7.2%.
The better results are contributed by better demand and selling price for its biomass products esp oil palm EFB fiber from China.

Lesser growth in profit is due to decrease in product margin, higher transportation cost and the one-off listing expense mentioned earlier.
Tax paid in FY14 is just 3%, due to many of its products granted pioneer status with tax exemption.
Net debt/equity ratio improves substantially after IPO and further drops to 0.14x in the end of FY14.
Heng Huat latest geotextile product palm fiber mats are fully sold since launched. It currently only has one production line with production capacity of 100 pieces per month. It plans to set up another line in Q1 of FY15.
The palm fiber mats can be used in construction and plantation sector to prevent soil erosion. Heng Huat highlighted that plantation players can enjoy a production cost saving of more than 2 times by using the palm fiber mats.
       Palm Fiber Mat
Last year Heng Huat bought land in Gua Musang to build a new factory that will increase its oil palm fiber production capacity. Its construction will only start in Q3 of 2015.
I think Heng Huat still has room to grow, albeit slow. 
If not because of the one-off listing expense, Heng Huat should be able to achieve PATAMI of RM12mil in FY14. 
With total shares of 205.8mil, EPS will be 5.8sen. So I'll keep my target price at 58sen base on PE of 10x.
Heng Huat might be one of the few companies in ACE market who shows good profitability and awaiting to be transferred to main board.

Friday, February 27, 2015

(Icon8888) HIL Industries - High Growth, Cash Rich, Undervalued

HIL Industries Berhad manufactures and sells industrial and domestic molded plastic products in Malaysia and the People’s Republic of China. It operates through two principal segments: Manufacturing and Property Development.
The company offers various services, including design and development, mold and dies fabrication, injection molding, in mold decoration, spray painting, silk screen and tempo printing, ultra sonic welding, digital printing, surface decoration, assembly, assembly machine fabrication, and blow molding.
It is also involved in the development of residential, commercial, and light industrial properties.
The company was founded in 1969 and is headquartered in Shah Alam, Malaysia.

HIL and A&M Realty has same major shareholder.

Quarter Result:
F.Y.QuarterRevenue ('000)Profit before Tax ('000)Profit Attb. to SH ('000)EPS (Cent)NAPS

The group has strong balance sheets. It has net assets of RM292 mil, ZERO borrowings and cash of RM108.4 mil. Based on 277 mil shares, cash per share is RM0.39, repesenting 44% of existing price of RM0.88.

Since early 2014, the group's earnings has been growing at leaps and bounce. Manufacturing and property development are the major contributors.

(RM mil)Mac 13Jun 13Sep 13Dec 13Mac 14Jun 14Sep 14Dec 14FY2013FY2014
> Manufacturing16.119.920.623.323.932.025.726.179.9107.7
> Prop development0.
> Manufacturing(0.8) *
> Prop development0. ^ *
Net profit(1.1)
shares (mil) 279279279279279279279279279279
EPS (sen)(0.4)
PBT margin (%)(3.6)7.57.812.214.817.319.524.06.719.5
> Manufacturing(5.0)6.06.811.
> Prop development60. #45.858.546.2

^ Since September 2014 quarter, property development has emerged as a maor earnings contributor.
# Property development profit margin is high, probably due to low land cost
* During FY2014, manufacturing and property development contributed equally to earnings. However, going forward, property development should play a more important role as the group books in further profit

Despite overall industry slowing down, the group remained saguine about the prospects of their property projects :-

Concluding Remarks

(a) The group has strong balance sheets with net cash of RM108.4 mil. Generous dividend payout in the future ?

(b) High property development profit margin propbably due to low land cost.
Despite making significant contribution to net profit, total revenue booked in over past 2 quarters are only RM29 mil.
Unfortunately I am not able to find out the GDV for the group's existing projects. But if margin is so high, impact to future earnings can be very huge.

For illustration purpose : based on assumption that total GDV is RM200 mil (a very conservative assumptions nowadays for property projects in Klang Valley). Remaining unbooked sales would be RM200 mil less RM29 mil = RM171 mil. Based on PBT margin of 46.2%, remaining PBT to be booked in is RM79 mil ? Net profit = RM59 mil ?

If that is the case, earnings over next one to two years looked pretty secured ?

KSL ends FY14 with record profit of RM340 mil

KUALA LUMPUR (Feb 27): Johor-based property developer KSL Holdings Bhd has reported a net profit of RM129.8 million or 24.85 sen a share in the fourth quarter ended Dec 31, 2014 (4QFY14), from a loss of RM1.4 million previously.

Revenue also came in 46% higher at RM166.6 million, against RM114.1 million previously.

The group’s better performance in 4QFY14 was largely attributed to higher profit margin from favourable product mix and fair value gain amounting to RM88.2 million for its investment properties.

In addition, the loss in the previous year’s same quarter was impacted by a RM13 million deferred taxation for Real Properties Gain Tax.

For the full FY14, KSL reported a record net profit of RM340.2 million or 80.65 sen a share, which is 87.4% higher than RM181.5 million a year ago. Meanwhile, annual revenue surged 17.8% to RM801 million, from RM680 million in 2013.

“Our sturdy FY14 performance is a testament to our successful business strategy of growing both our property development and property investment segments, which noted healthy double-digit growth in the year,” said Ku Hwa Seng, chairman of KSL.

“With our pipeline property development launches of more than RM6 billion in gross development value (GDV) in the next five years, and continued marketing initiatives planned for the year, we are positive of sustaining our growth momentum, going forward,” he added.

KSL said its revenue from the property development segment rose 18.4% to RM643.1 million in FY14, against RM542.9 million in the previous financial year, on the back of sustained demand for affordable housing.

At the same time, revenue from property investments, led by the group’s integrated KSL City Mall and Hotel, rose 14.8% to RM154.6 million, on higher yield and patronage. Revenue from investment properties currently constitutes 19.3% of group revenue of RM801.2 million.

KSL has proposed a final single-tier dividend of 5 sen per share in respect of FY14, subject to shareholders’ approval in the upcoming Annual General Meeting. Existing shareholders can also opt to reinvest the final dividend under the Dividend Reinvestment Plan.

Together with the earlier-paid interim dividend of 5 sen per share, KSL has declared total dividends of 10 sen per share in respect of FY14.

According to KSL, the group’s ongoing developments on approximately 100 acres of land are worth a total GDV of RM3 billion, to last till 2017. Most of the projects are in Johor and Klang Valley.

Its pipeline projects from the balance land bank of 2,100 acres, have an estimated GDV of no less than RM30 billion in Johor and Klang Valley, set to sustain the group for at least the next 15 years.

KSL (fundamental: 2.6; valuation: 0.6) closed 16 sen or 6.81% lower at RM2.19, with a market capitalisation of RM2.22 billion.

(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.)

Mudajaya 4Q in red, full year loss at RM70m on weaker construction segment

KUALA LUMPUR (Feb 27): Construction outfit Mudajaya Group Bhd registered a net loss of RM99.71 million in its fourth quarter ended December 31, 2014 (4QFY14) versus a net profit of RM22.9 million a year earlier as revenue fell.

In a statement to Bursa Malaysia today, Mudajaya (fundamental: 1.15; valuation: 1.8) said revenue dropped to RM188.75 million from RM334.34 million.

For its full year, Mudajaya registered a net loss of RM70.23 million against a net profit of RM151.18 million a year earlier. Revenue fell to RM1.04 billion from RM1.54 billion, mainly on lower construction income.

Mudajaya said the weaker performance at its construction segment was due to higher cost for its operations.

Moving forward, the firm said the construction sector in Malaysia looks promising in the coming years due to expectation of government and private projects.

These projects include the Mass Rapid Transit Line 2 & Line 3, power plants and highways, according to the firm.

Mudajaya said its strategy involved building up assets that can generate recurring income.

The company said construction, and property development would remain its main revenue source for the foreseeable future.

At 12:30pm today, Mudajaya shares settled two sen or 1.23% lower at RM1.61, giving it a market capitalisation of RM866.82 million.

(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.)

Supermax 4Q net profit slips 19.9% dragged down by start-up costs

KUALA LUMPUR (Feb 27): Supermax Corp Bhd, the world's second largest rubber gloves maker by volume, saw its net profit slip 19.9% to RM20.07 million or 2.95 sen for the fourth quarter ended Dec 31, 2014 (4QFY14) from RM25.05 million or 3.68 sen a year ago, dragged down by start-up costs for its new lines at its two new plants in Meru, Klang.

Revenue in 4QFY14, however, rose 34.6% to RM258.75 million compared with RM192.24 million in 4QFY13, as the group had fully recovered from the fire at one of its plants in the quarter under review and also benefited from a stronger US dollar which had appreciated by 5%.

In a filing with Bursa Malaysia today, Supermax attributed the lower profitability to start-up costs incurred as the group continued to install and test-run brand new lines at its two new plants in Meru.

"These initial costs and will not be a factor once all the lines have been installed and are running at optimum levels," it said.

For the full year of 2014 (FY14), its net profit fell 15.8% to RM100.8 million from RM119.72 million the previous year, while revenue declined 4.6% to RM1.01 billion from RM1.05 billion in FY13.

Nevertheless, Supermax (fundamental: 1; valuation: 0.6) is proposing a final dividend of 3 sen per share for FY14 for the approval of the shareholders at a forthcoming annual general meeting (AGM).

"Average selling prices have been trending flat to lower in 2014 in tandem with lower raw material prices and rising competition in the nitrile division," said Supermax.

"While we are increasing production output of nitrile gloves in line with the current market demand, we have been maintaining our manufacturing margins of nitrile glove at between 9% and 11% to be in line with global market prices, especially nitrile gloves from China and Thailand. This is in line with our objective to be globally competitive," it added.

In a separate filing with Bursa Malaysia today, Supermax said it intends to seek its shareholders’ approval at the upcoming AGM on the proposed appointment of Tan Sri Rafidah Aziz as its chairman and independent non-executive director.

"Upon obtaining shareholders’ approval on the proposed appointment, Supermax's executive chairman and group managing director (MD) Datuk Seri (Stanley) Thai Kim Sim will be redesignated to group MD (only).

"The proposed appointment and redesignation reinforce clear division of roles and responsibilities between the chairman and group MD respectively and are in line with the recommendation of Malaysian Code on Corporate Governance 2012," said Supermax.

Supermax shares closed one sen or 0.46% at RM2.19 today, with a market capitalisation of RM1.46 billion.
(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.)

如何计算和操作FBMKLCI Put Warrant?

顺应网友的要求,今天特别写一篇简单的Put Warrant计算方法,以及要如何操作这些Put Warrant。

我们都比较了解和熟悉Call Warrant(认购凭单),但是对于Put Warrant(认沽凭单),很多人还是不太了解。

在大马交易所上市的Put Warrant并不多,那些股票代号后头有H的(如HB, HC,HD,HE,HF,HG。。)就是Put warrant。

Call Warrant是博取在股票或指数上涨时赚钱,而Put Warrant则是博取在股票或指数下跌时赚钱。

简单来说,买进Put Warrant的目的就是希望股票或指数跌得越多越好,越跌就越赚钱。

要操作FBMKLCI的Put Warrant,我们首先必须要了解该凭单的转换价(Exercise/Conversion Level)和转换比例(Exercise/Conversion Ratio)。


从BURSA网站,所得到FBMKLCI-HC的资料(Profile for Structured Warrants)如下:

Issuer:Macquarie Capital Securities
Exercise Level:1820
Exercise Ratio:200:1

因为这是Put Warrant,所以必须要等到指数跌到低于1820点时才可以转换。



结算方法 =(Exercise Level - Final Level)/ Ratio

根据昨天综合指数的收市行情(1716.58点)来算,那么FBMKLCI-HC应该值得(1820 - 1716)/ 200 = RM0.52

也就是说假如昨天是该凭单的截止日的话,那么Macquarie Capital 投行就要付你RM0.52。




那么以1600点来做结算,FBMKLCI-HC将有机会可以去到(1820-1600)/ 200 = RM1.10



我不太鼓励新手(或者不了解的投资者)操作Call Warrant和Put Warrant,首先你要对股价或指数的走势很有把握,还要拿捏得当,也要在跌时果断止损,而且还要承受得住压力。



周顯 - 樓市只會慢慢跌 大插兩成違理論


流通性不高 應先跌成交再跌價




[周顯 投資二三事]]

Kumpulan Perangsang Selangor posts fourth consecutive quarterly profit

KUALA LUMPUR (Feb 26): Kumpulan Perangsang Selangor Bhd (KPS) posted a fourth consecutive quarter of profits, with a net profit of RM32.1 million for the fourth quarter ended Dec 31, 2014 (4QFY14) compared with a net loss of RM10.69 million a year ago.

Revenue, however, fell 3.3% to RM85.2 million from RM88.07 million in 4QFY13. Earnings per share for 4QFY14 was 6.4 sen compared with a loss per share of 2.1 sen a year ago.

The Selangor government-owned diversified company attributed its return to the black to contribution from the infrastructure and utilities’ associated companies.

However, KPS (fundamental: 1.1; valuation: 1.8) pointed out revenue from its hospitality and infrastructure and utilities’ segments recorded lower revenue.

KPS’s hospitality division collected less revenue in 4QFY14 due to Quality Hotel Shah Alam’s closure, although the effect was offset by higher year-on-year contribution from Brisdale Hotel International Sdn Bhd.

Although KPS’ infrastructure and utilities business made a pre-tax profit of RM43.77 million and brought profit on the group level in 4QFY14, the segment’s revenue was lower as its construction earnings were smaller.

Only the infrastructure and utilities and trading segments recorded pre-tax profit. KPS said its other divisions – hospitality, golf club and recreational activities, oil and gas (O&G), telecommunication, and investment holding – were in the red in 4QFY14.

For the full year of 2014 (FY14), KPS posted a net profit of RM115.97 million or 23.2 sen a share, down 55.99% from RM263.49 million or 54.9 sen a share in FY13, on higher allowance on impairment of trade receivables, while there was an one-off gain from selling a subsidiary in the prior year.

Revenue was 4.3% higher at RM315.37 million from RM302.47 million in FY13.

Going forward, KPS said its infrastructure and utilities division will have to seek new investment opportunities once the Selangor government takes over its water assets.

However, the group expects its O&G business to contribute positively to its results, seeing as the segment’s subsidiary NGC Energy Sdn Bhd had registered a net profit of RM3.71 million in FY14, from RM1.19 million the previous year.

KPS shares dropped one sen or 0.64% to close at RM1.56 today, giving it a market capitalisation of RM783.44 million.
(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.)

Thursday, February 26, 2015

只要偏離了原本的目的,即使是正確的事也沒有任何意義 - 一個磨坊水車的故事 - mrmarkettw

































(補充:巴菲特曾說,效率市場是個愚蠢的理論,但這套理論學術界現在仍然還在用。 )

「經濟學是一種學術,一門描述不懂經濟學的人如何創造財富的學科。」- Turner & Trompenaars

I-Bhd profit for 2014 rises 21.5% to RM53.4mil

PETALING JAYA: I-Bhd’s net profit for the fourth quarter ended Dec 31, 2014, was down to RM13.67mil from RM29.58mil a year earlier. Revenue was up 22.46% to RM68.16mil, while earnings per share dropped to 1.38 sen from 6.15 sen.
The reduced profit was mainly due to a lower fair value gain on investment properties of RM1.4mil compared with a fair value gain of RM13mil in the previous period.
From a segmental perspective, property development contributed a pre-tax profit of RM58.7mil, while leisure contributed RM12.9mil and investment properties recorded RM1.4mil.
The company’s cash position improved to RM159.2mil from RM7.07mil previously.
In a statement, I-Bhd group executive chairman Tan Sri Lim Kim Hong reiterated the group’s adoption of a minimum 30% dividend payout policy.
“In respect of the financial year ended Dec 31, 2014 (FY14), a final single-tier dividend of 30% of the group’s net profit amounting to RM16.03mil, or 2.2 sen per share, has been proposed by the directors for shareholders’ approval at the forthcoming AGM,” Lim said.
I-Bhd’s full-year net profit rose 21.48% to RM53.41mil on the back of a 71.62% increase in revenue to RM261.11mil.
The property development segment alone accounted for 77.1% and 84.5% of the group’s revenue and profit before tax, respectively.
The better results were driven by higher percentage of recognition for both project completion and sales for i-Residence, i-SOHO, i-Suites and the newly launched Liberty Tower.
The i-SOVO project was completed in the fourth quarter and handed over to buyers.
Commenting on the company’s future business strategy, Lim said while property development would remain the main revenue contributor, the group would also build up its recurring income businesses from the leisure and property investment segments. This is so that once i-City is fully developed, a strong recurring income base would have already been put in place.
“Our long-term business plan is to have half of the group’s earnings coming from recurring revenue so that we can withstand the downside of any property cycle,” envisaged Lim.
Moving forward, I-Bhd expects a gross development value (GDV) of RM2bil from its property development segment during FY15 to ensure that it is able to sustain its growth momentum.
“The group has reached a stage where property development will continue to be the major contributor to the group. In 2015, the group plans to launch both ‘8 Kia Peng’ as well as the ‘Central Towers’ developments,” said I-Bhd.
8 Kia Peng is a luxury serviced apartment development sited within the vicinity of the Kuala Lumpur City Centre with an estimated GDV of RM82mil.
Central Towers, meanwhile, is a RM1.2bil development comprising an office tower, two residential towers, the Double Tree by Hilton Hotel, a convention centre and a performing arts centre.

Exciting times ahead for GHL, says CIMB Research

KUALA LUMPUR: CIMB Equities Research sees exciting times ahead for GHL Systems and maintains its Add call, with a slightly higher RM1.11 target price.
It said on Thursday the higher target  price was based on 23.8 times CY16 P/E (40% premium over the payment sector average in view of GHL’s strong FY13-16 EPS CAGR of 78%).
“Overall, we think that GHL’s growth prospects are intact and we are still confident of its execution strategy,” it said.
GHL’s FY14 core net profit was in line with CIMB Research’s expectation at 104% of its estimate but only 86% of consensus.
Despite a higher effective tax rate in FY14, core net profit rose to RM9.7mil versus RM5.3mil FY13, driven by stronger sales from its cash transaction payment acquisition (TPA) segment following the e-Pay acquisition.
“We raise our FY15-16 EPS forecasts by 1%-4% to account for higher TPA contribution driven by new merchant acquisition activities.
“Stronger TPA earnings and M&A activities in new markets are potential re-rating catalysts. GHL is our top pick in the domestic tech sector,” it said.
GHL’s revenue in 4Q14 rose to RM49.6mil versus RM16.2mil a year ago, mainly due to higher contributions from the TPA segment, which grew from RM4.1mil to RM36.7mil following the acquisition of e-Pay.
“GHL is in the process of integrating its back-end system to the various banks in order to implement its TPA agreements to accept international credit cards.
“Management highlighted that the bulk of its effort in 2015 will be directed towards TPA initiatives in Malaysia and the Philippines,” it said.
CIMB Research said  GHL is targeting to sign up 3,000 to 4,000 merchants in Malaysia following its agreement with Global Payments this year.
 GHL also targets to sign up 300-500 merchants per month in the Philippines to accept payments using UnionPay and JCB International cards.
“Management expects its first TPA merchants to be on board in 2Q15 and expects more merchants recruited in 2H15, which is in line with our expectations," it said.

周顯 - 匯控電盈 殺傷力遠超老千股

匯控電盈 殺傷力遠超老千股



老蘭蒲友傷女 遠不及敦厚男




[周顯 投資二三事]

Wednesday, February 25, 2015

Mitrajaya - 4Q results: Finishing inline


  • 4QFY14 results came in with revenue of RM135.8m (+10% YoY, -7% QoQ) and PATMI of RM16.1m (+20% YoY, +23% QoQ).
  • For the full year FY14, PATMI came in at RM53.7m, representing a 114% YoY growth on a core basis (i.e. after stripping out RM4.2m disposal gains on non-core assets recorded in 3Q last year).


  • Full year FY14 PATMI was within expectations (i.e. +4.6% above our forecast).


  • 5 sen first and final dividend was proposed in relation for the year FY14 (FY13: 2 sen), above our forecast of 3.9 sen.


  • Construction progressing well. Construction revenue jumped 72% YoY, fuelled by contributions from key jobs such as the LRT stations, MACC Headquarters and Symphony Hills. Construction EBIT margin also expanded YoY from 6.7% to 10.3% as newer jobs, which command higher margins, took a larger contributing share.
  • Orderbook at an all-time high. New job wins hit a record high of RM1.1bn in FY14 (FY13: RM501m). Mitrajaya has also started the year well with RM230m in new job wins YTD, hitting 46% of our full year target. Its orderbook currently stands at RM1.9bn, implying a superior 5.1x cover on FY14 construction revenue.
  • Softening property sales for 2nd Phase. Mitrajaya launched Phase 2 (RM200m) of its Wangsa 9 Residence in Dec and has seen take up rate of only slightly above 10% (as of end Jan). Nonetheless, we are not entirely concerned by this as Phase 1 (RM200m) which was launched in Oct has hit 70-80% take up rate.


  • Delays in construction execution and softening property market.


  • No changes to estimates as the results were inline.
  • We maintain our FY15 and FY16 PATMI forecast of RM77.7m and RM93.3m, translating to 45% and 20% YoY growth respectively.


BUY, TP: RM1.97
  • We continue to highlight Mitrajaya as our top small cap construction pick given its strong earnings visibility backed by its sizable orderbook.


  • Our TP is still based on an unchanged 10x P/E on FY15 earnings. The stock currently trades at 8.5x and 7.1x FY15- 16 P/E with dividend yield of 3.5% and 4.3%.
Source: Hong Leong Investment Bank Research - 25 Feb 2015

Muhibbah consortium bags RM166 mil EPCIC contract

KUALA LUMPUR (Feb 25): A consortium of JGC Corporation, PT JGC Indonesia, and Muhibbah Engineering (M) Bhd has bagged an engineering, procurement, construction, installation and commissioning (EPCIC) contract worth RM116 million.

According to Muhibbah’s (fundamental: 1.15; valuation: 0.6) statement to the exchange, the consortium has received the letter of award for the EPCIC contract from Regas Terminal (Sg Udang) Sdn Bhd, a unit of Petronas Gas Bhd (fundamental: 2.7; valuation: 0.9).

Under the contract, the consortium will undertake the EPCIC for the RGT1 minimum send-out capability improvement project for the LNG Regasification Terminal in Sungai Udang, Melaka.

The contract will be for a duration of 22 months, commencing from the first quarter of 2015, to be completed by the fourth quarter of 2016.

“The contract is expected to contribute positively to the earnings and net assets of Muhibbah Group for the current and future financial years. The contract does not have any impact on the share capital and/or shareholding structure of Muhibbah,” it said.

Muhibbah rose 7 sen or 3.2% to RM2.28 at 3.05pm, giving it a market capitalisation of RM954.53 million.

(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.)

CIMB Research retains Add for Only World Group at TP of RM2.62

KUALA LUMPUR:  CIMB Equities Research is maintaining its Add rating for Only World Group Holdings Bhd (OWG) with a target price of RM2.62, which is an upside of 68.9% from its last traded price of RM1.55.
It said on Wednesday the target price was based on 19 times CY16 EPS, a 20% discount to the target P/E of its larger cap F&B peers.
“Potential rerating catalysts are the launch of the Genting Integrated Tourism Plan and signing of the tenancy agreements to fill up Komtar Penang,” it said.  
In OWG’s first half ended Dec 31, 2014, core EPS of 3.9 sen was in line at 51% of the research house’s full-year forecast.
The stronger on-quarter results in 2Q was due to increased patronage at its food outlets and amusement parks with the year-end holiday season.
“Its EBITDA margin was 2.7 percentage points below forecast due to listing expenses and equipment write-off relating to the relocation of outlets at Genting,” it said.
During the six months, in addition to the increased holiday season traffic, OWG also saw a net addition of three outlets in Genting (closed five and opened eight outlets), which contributed to a 28% increase in revenue on-quarter.
“OWG’s revenues continue to be dominated by FSOs (79%), followed by amusement parks (21%).
 “We expect OWG to complete the signing of the various tenancy agreements to fill up the space in Komtar by end-1HCY15. OWG will keep some of the space for its own F&B operations (levels 59 and 60) and lease out the remainder (levels 5 and 65, the roof top bar).
“We have not imputed any contribution from the OWG-operated spaces in Komtar. Upside to our forecasts include further space expansion in Komtar, which will increase its net lettable area,”  it said.
CIMB Research said while earnings in FY15 will be flat due to the ongoing renovation at Genting and Komtar, investors can look forward to an exciting 2016 when Sky Avenue is launched and the theme park is ready.
“The newly-refurbished Komtar will also be ready by end-2015. This will drive EPS growth of 46-47% in FY16-17. We also expect a maiden dividend payment of 2.8 sen commencing FY16,” it said.