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Wednesday, April 23, 2014

Redtone net profit up 27% to RM4.98mil (Star)

Redtone International Bhd third quarter ended Feb 2014 net profit rose 27% to RM4.98mil from RM3.9mil a year ago from higher date revenue.

In a filing to Bursa Malaysia on Wednesday, the group said it posted a 1% increase in revenue to RM4.09mil from RM4.04mil a year ago, due to the increase in date revenue in its third quarter.

Earnings per share for the period stood at 0.99 sen compared to 0.82 sen the previous year.

Moving forward, the group said its data and broadband services, which includes the group’s WiFi hotspots, is expected to be the main contributor for FYE2014, while the voice business segment will continue to be the group's cash cow.

“The group intends to continue to build its success as a data and broadband solutions provider by actively tendering projects from the Government sectors and telco industry, as well as securing more small and medium enterprise customers,” it said.

The group said its profit will be strengthened by collaboration with Maxis Broadband Sdn Bhd on its Network Sharing and Alliance Agreement, which will contribute positively to the group's earnings for the next 10 years.

“Collaboration with Telekom Malaysia on its High-Speed Broadband services is also expected to yield positive results,” it said.

However, Redtone expects limited growth prospects from the discounted voice call business and distribution of prepaid and reload services in China.

“Nevertheless, this segment continues to generate solid cash flow to the group,” it said.

Tuesday, April 22, 2014

PDZ confirms Edge’s report that Robert Tan plans to divest his shares (Edge)

PDZ Holdings Bhd confirmed a report in The Edge Financial Daily today that Tan Sri Robert Tan Hua Choon is selling off a block of shares in the company.

“The board of directors wishes to announce that Tan Sri Datuk Tan Hua Choon has confirmed that he is holding talks with some parties with the view of divesting his shareholdings in the company,” said PDZ in a filing with Bursa Malaysia.

The Edge Financial Daily today reported there is fresh speculation that small cap king Tan Sri Robert Tan Hua Choon is selling off a block of shares in shipping outfit PDZ Holdings Bhd.

Closing at 16 sen yesterday, PDZ’s share price rose 33% from 12 sen early this month, with active volume.

The stock’s price has also doubled since the beginning of this year.

According to PDZ’s 2013 annual report, Tan’s shareholding as at Oct 21, 2013 stood at 19.13%. The stake is worth RM26.8 million based on the stock’s closing of 16 sen yesterday.

It was reported that several parties, including Efogen Sdn Bhd, were interested in buying Tan’s block of shares.

Market talk is that PDZ would transform from a container shipping firm into an oil and gas player, via the injection of Efogen’s O&G assets.

For the second quarter ended Dec 31, 2013, PDZ posted wider net losses of RM3.35 million, from RM419,000 in losses in the previous corresponding period. Revenue decreased to RM38.13 million, from RM53.48 million.

For the six-month period, PDZ recorded RM2.57 million in net losses, from RM684,000 in losses previously. Revenue was lower at RM81.73 million, from RM106.86 million.

Thursday, April 17, 2014

Nearly RM1b Langat 2 water treatment plant awarded to Salcon-MMC-AZRB JV (Star Update)

Its all systems go for the much-awaited Langat 2 Water treatment plant and water reticulation system in Selangor with the awarding of the RM993.88mil contract.

Salcon Bhd said on Thursday its joint venture with MMC Corporation Bhd and Ahmad Zaki Resources Bhd (AZRB) had received the letter of acceptance from Pengurusan Aset Air Bhd.

Salcon has a 36% stake in the JV, MMC 34% and AZRB 30%.

The contract involves building the 1,130 million litres per day water treatment plant and water reticulation system in Selangor under phase one

“The project is expected to contribute positively towards the earnings and net assets of Salcon Group for the financial years ending Dec 31, 2014, 2015, 2016 and 2017,” said Salcon.

L&G aims for similar success (Edge)

Not rated with target price of 68 sen: Following the success of its maiden foray in Ampang, Kuala Lumpur, with its residential development called Elements @ Ampang, L&G is taking another jab at Ampang.

The group recently acquired a 5.66-acre (2.29ha) leasehold commercial land adjacent to Elements @ Ampang for a proposed mixed development project to be developed on a joint venture basis with Malaysia Land Properties Sdn Bhd (Mayland), which is known for its expertise in studio serviced apartments. This will mark L&G’s second collaboration with the latter after Elements @ Ampang.

The residential development has an estimated gross development value (GDV) of RM788.7 million.

We are expecting the per sq ft pricing for the residential component of the development to be in the range of RM800 to RM900, which will ensure a good take-up rate.

Other planned launches are Phase 2 of Damansara Foresta condominium in Bandar Sri Damansara (GDV: RM500 million) and the Tuanku Jaafar Golf & Country Resort project in Negeri Sembilan.

In the meantime, unbilled sales of RM600 million (as at February 2014) are expected to last the company through the next 15 months.

We are valuing L&G at a fair value of 68 sen, pegging 2014 earnings per share of 8.5 sen to 2014 price-earnings ratio of 8 times, which is the average of its closest peers.

L&G is a good trading stock, with the price uptrending in a cyclical fashion. It is a good stock to pick up on dips. The important thing is that at current level, we believe the stock is trading below its fundamentals. Provided that the broader market remains sound, we expect the cyclical uptrend in the price of L&G to continue. — MIDF Research, April 16