KUALA LUMPUR (Oct 5): Based on corporate news flow and announcements today, stocks in focus tomorrow (Tuesday, Oct 6) could include: MBSB, DRB-Hicom, TNB, YTL Power, Mudajaya, WCT Holdings, Yee Lee, Wintoni, Kian Joo, AHB Holdings and Minetech.
Malaysia Building Society Bhd (MBSB) and Bank Muamalat Malaysia Bhd, as well as their rated debt issues are placed under RAM Rating Services Bhd’s rating watch, with a developing outlook.
The rating action was triggered by the announcement on Oct 1, that MBSB had obtained Bank Negara Malaysia's (BNM) approval to commence negotiations for the merger with Bank Muamalat.
The merger could result in becoming Malaysia's second-largest Islamic bank, with more than RM60 billion in assets, as at end-June 2015.
The ratings have been placed on a developing rating watch, as details of the proposed funding plan, capitalisation levels, integration time line and approach, as well as the final group and shareholding structures, are still unavailable. These matters are expected to be the subject of negotiations, over the next three months.
The Employees Provident Fund is the largest shareholder of MBSB; while DRB-Hicom Bhd owns a 70% stake in Bank Muamalat and the remaining 30% equity belongs to Khazanah Nasional Bhd.
Khazanah’s managing director Tan Sri Azman Mokhtar said today that the Malaysian state-owned investment arm was in no rush to divest the 30% equity in Bank Muamalat.
Tenaga Nasional Bhd (TNB) announced that YTL Power International Bhd’s subsidiary, YTL Power Generation Sdn Bhd (YTL), is no longer exporting electricity to the grid, after both companies' power purchase agreement (PPA) — which was signed on March 31, 1993 — expired on Sept 30.
Concurrently, a Leasing Agreement which YTL entered into with TNB to lease the latter's land in Paka, Terengganu and Pasir Gudang, Johor to build its power stations, was also affected.
The PPA was the first PPA signed between TNB and an Independent Power Producer (IPP), and the only PPA that was based on Take-or-Pay mechanism for a period of 21 years.
Mudajaya Group Bhd’s unit, Muda Jaya Corp Bhd, has been awarded a RM43.89 million contract from Siemens Malaysia Sdn Bhd for additional scope of works in relation to the main civil works at the Pengerang Cogen Power Plant in Johor.
This adjustment has brought its original contract price for the same project from RM55.5 million to RM99.37 million.
The project is targeted to be fully completed by July 30, 2017, with a construction period of 23 months.
Mudajaya Corp had on Nov 1 last year, signed the original contract with Siemens Malaysia to handle the project. At the time of the announcement, Mudajaya had said the main civil works (without optional works) were expected to be completed by Feb 5, 2016.
WCT Holdings Bhd's wholly-owned subsidiary, WCT Bhd (WCT), has received a contract worth RM70.4 million from 1MDB Real Estate Sdn Bhd, a subsidiary of controversial 1Malaysia Development Bhd (1MDB).
The contract will see WCT taking on the proposed earthworks for Lifestyle Quarter for Phase 1 of the proposed mix development at Tun Razak Exchange (TRX) in the heart of Kuala Lumpur.
The group said that the scope of work consists of earthworks, rock probing and grouting works, with a target for completion by November 2016.
Yee Lee Corp Bhd expects revenue derived from its beverage segment to double, with the addition of its exclusive right to distribute Red Bull energy drinks in Malaysia.
“The addition of Red Bull is expected to double the group beverage [segment] revenue. As for profits, we don’t know how much it will contribute yet, but it would definitely contribute positively to Yee Lee’s future profits,” its group chief executive officer Lim Ee Young told a press conference that was held to announce the successful transition of distribution services of Red Bull energy drinks in Malaysia today.
Currently, Yee Lee distributes Spritzer and Cactus brand bottled water. Spritzer and Cactus brands are bottled by Spritzer Bhd.
Yee Lee’s 32.69% associated company, Spritzer, raked up a total revenue of RM253.67 million for its financial year ended May 31, 2015.
Red Bull's exclusive agent Allexcel Trading Sdn Bhd's general manager Charles Wong said the company is targeting to sell five million cartons — 24 cans per carton — of Red Bull energy drinks this year.
Yee Lee was appointed by Allexcel to distribute and sell the Red Bull Gold, Red Bull Less Sugar and Red Bull Bottle energy drinks in Malaysia, for a period of five years, beginning Aug 1, 2015.
Wintoni Group Bhd has clarified that the company has not received any notice from shareholders intending to make further changes to the company's board.
The ACE Market-listed company issued a statement in response to media reports that a group of shareholders had a discussion after the company's extraordinary general meeting (EGM) on Sept 11, wanting to have further changes on the board.
Wintoni said it is the position of the company, having taken legal advice, that this second discussion did not constitute a valid EGM as required by law, and accordingly, no business was validly transacted.
It also said the appointment of newly-named directors has already been dealt with in the EGM conducted by the Chairman Datuk Seri Mohd Shariff Omar.
Aluminum can maker Kian Joo Can Factory Bhd said the disposal consideration for its entire stakes to Aspire Insights Sdn Bhd remained unchanged at RM1.47billion or RM3.30 per Kian Joo share.
It also clarified that the period to fulfil the conditions precedent, has been extended to March 2016, for the privatisation offer was due to ongoing legal suit, document preparation and additional time for the buyer to fulfil due diligence.
Kian Joo said the extensions on the date to March 23, 2016, from Sept 23, 2015 — in which all conditions precedent to the business sale agreement (BSA) entered between both parties have to be fulfilled — were due to the above three reasons.
Office interior products maker AHB Holdings Bhd's managing director cum CEO, Yong Yoke Keong, has increased his stake to 18.32%, after acquiring a cumulative 7.58 million shares or 4.74% stake last week.
Yong bought 4.74 million shares or 2.96% stake on Oct 1, through a direct business transaction. Additionaly, he had acquired 2.84 million shares or 1.78% stake from the open market.
These acquisition has resulted in Yong becoming the single largest shareholder of AHB, followed by Dexx Technologies Sdn Bhd.
Quarry operator Minetech Resources Bhd has proposed to acquire four parcels of land in Perak, as part of its plans to diversify its existing business to include property development.
In a filing with Bursa Malaysia, Minetech said it signed a conditional sale and purchase agreement today with Glamour Heights Sdn Bhd, to acquire a 7,924 sq m parcel of vacant residential development land in Kinta, Perak for RM6 million cash.
The land is approved for the development of a 21-storey mixed project, whereby Minetech will be the main developer, while Glamour Heights will be the co-developer to assist in the construction of the Glamour Avenue project.
The estimated gross development value (GDV) and the estimated gross development cost (GDC) of the project are RM76.97 million and RM68.99 million respectively, yielding an estimated profit of RM7.98 million to Minetech, said the group.
Glamour Avenue project will be its maiden venture into the property development industry; it expects to fund the purchase using internal funds and/or bank borrowings.
Minetech is also proposing to buy two companies, namely Medium Visa Sdn Bhd (MVSB) and Harapan Iringan Sdn Bhd (HISB), for RM9.43 million and RM7.51 million respectively.
MVSB owns two parcels of adjacent leasehold lands (Land A and Land B) in Bernam Timur, Perak, measuring 124,136.7 sq m. HISB, meanwhile, owns a 99,730 sq m parcel of leasehold land (Land C), also in Bernam Timur.
Minetech intends to fund the acquisitions of MVSB and HISB using proceeds from its rights issue in 2014, subject to approval from its shareholders at an extraordinary general meeting (EGM) to be convened.
(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.)