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Friday, September 19, 2014

Talam returns to black with 2Q net profit RM7.6m (Edge)

Talam Transform Bhd has returned to black with a net profit of RM7.6 million in the second quarter ended July 31, 2014, from a net loss of RM6.5 million a year ago.

Revenue multiplied 4.55 times to RM88.7 million from RM19.5 million previously.

In a statement to Bursa Malaysia, the property developer said the bottomline improvement was mainly due to higher gross profit, other income, and lower finance cost.

However, Talam said the net profit was dampened by the provision for impairment on property development costs of RM46.3 million.

For the half-year period, net loss widened to RM11.8 million versus RM7.4 million in the previous corresponding period, while revenue skyrocketed to RM170.7 million from RM41.3 million a year earlier.

Talam said the widened net loss was affected by higher administrative and other expenses, while its revenue jump was mainly due to the disposal of development lands by its property development and investment division.

“The group will continue to enter into joint ventures with reputable corporations to develop its land banks,” said Talam on its prospects.

However, Talam foresees a challenging financial year ahead due to tougher lending guidelines by Bank Negara Malaysia and increasing construction costs.

Formis (FRB) in partnership talks with big IT service providers (Edge)

Information and Communications Technology outfit Formis Resources Bhd is currently in discussions with large technology service providers to form partnerships that will help it “do bigger things”, especially in the area of innovation and disruptive technology.
“These discussions are all underway,” said Datuk Larry Gan, group chief executive officer of Formis after the company’s annual general meeting (AGM) and extraordinary general meeting yesterday.

Gan said these partnerships will help the firm tap into the large corporations’ clientele market, apart from growing its existing small and medium enterprises (SME) customer base. “For instance, we will go to a bank and figure out how to help them to adopt disruptive technologies and compete locally as well as regionally and globally,” he said.

For these initiatives, Formis will leverage on a new unit created within the group, dubbed “Omesti innovation lab” that provides a range of technology systems, services and solutions for financial institutions, government departments, utility and energy firms, and telecommunications...

Formis’ resolution to change its name to Omesti Bhd was approved during the AGM...

Formis chairman Tan Sri Megat Najmuddin Megat Khas said Formis is in for “exciting times” as it rejuvenates itself to become a world-class technology company.”

This article first appeared in The Edge Financial Daily, on September 19, 2014.

TRC Synergy sees biggest gain among highway construction beneficiaries (Edge)

TRC Synergy Bhd saw the biggest increase in share price on Friday among all construction stocks which are touted to be the beneficiaries of the upcoming highways to be constructed next year, in which Works Minister Datuk Fadillah Yusof said RM20 billion worth of jobs will be dished out.

While the highways will give construction players such as TRC Synergy, IJM Corp Bhd, WCT Holdings Bhd, Mudajaya Group Bhd, Bina Puri Holdings Bhd, and Ahmad Zaki Resources Bhd (AZRB) a huge boost in their order books, analysts said investors have already priced in the projects...

Yesterday, Fadillah told reporters that works on seven new highways will begin next year. Those highways are Duta-Ulu Kelang Expressway’s (DUKE) extension works, Kidex, WCE, KL Outer Ring Road (KLORR), Sg Besi-Ulu Kelang Elevated Expressway (SUKE), and Serdang-Kinrara-Putrajaya Highway (SKIP).

Hong Leong Investment Bank’s (HLIB) head of research Low Yee Huap said the aforementioned stocks could be the key beneficiaries for the highways. Nonetheless, news of the highways is not new and have been largely priced in.

“Out of the seven highway projects, six have been previously speculated in the market.Only the SKIP highway has sketchy information. As such, we believe that market has mostly priced in the above projects as part of contract wins assumption for major construction players,” he said in a note this morning.

HLIB also had hold ratings for all the beneficiaries. The research house’s target prices are: IJM Corp (RM7.09), WCT (RM2.26), TRC (57 sen) and Mudajaya (RM2.48). HLIB did not rate AZRB and Bina Puri.

A chart “sell” on TAS Offshore (Edge)

Due to the KLCI’s softer tone, we are recommending a chart “sell” on TAS Offshore Bhd. TAS has fallen off its all-time peak of RM1.65 since July 2014 to its current level of 94.5 sen, erasing approximately RM123.9 million from its market capitalisation.

In line with our weaker chart outlook for crude oil prices, we are bearish on the oil and gas segment, which will also adversely impact investor sentiment towards TAS. The company’s share price weakness is in line with the softer European Brent crude prices which stalled at US$115.77 in mid-June 2014 with negative chart signals. We have a “sell on rallies” stance on Brent and its downside target levels are US$93.75, US$83.75 and US$78.70 in the medium term.

A check of Bloomberg consensus reveals that only one research house has coverage on TAS. The stock is currently trading at an inexpensive price-earnings ratio of 5.77 times and at a discounted price-to-book value ratio of 0.95 times. The reported shareholding changes on Bloomberg did not reveal any major transactions over the past month.

TAS’ chart trend on the daily and weekly time frames is very weak and is firmly down. Its share price made a large plunge since its weekly Wave-5 high of RM1.65 in July 2014. Since that high, TAS plunged to its recent September low of 94.5 sen.

As prices broke above their recent key critical support levels of RM1.28 and RM1.13, look to “sell” TAS on any rebounds to its resistance areas as the moving averages depict very firm short- to medium-term downtrends for this stock.

The daily and weekly indicators (like the CCI, DMI, MACD and Oscillator) have issued “sell” signals and now depict very firm indications of TAS’ eventual move towards much lower levels.

It would attract very weak buying interest at the support levels of 75 sen, 80 sen and 89 sen. We expect TAS to attract major liquidation towards its resistance levels of 94.5 sen, RM1.13 and RM1.28. Its downside targets are located at 89 sen, 54 sen and 24 sen.

Thursday, September 18, 2014

YFG gets RM17.43mill electrical installation contract (Edge)

YFG Bhd's subsidiary YFG Engineering Sdn Bhd has received a letter of reward from Pembinan Mitrajaya Sdn Bhd for an electrical installation contract worth RM 17.435 million.

According to the group’s filing to Bursa today, the electrical works are for two apartment blocks of 800 units, the blocks’ parking bays and their surrounding recreational amenities, among others, at the Symphony Hills project in Cyberjaya.

The project commenced on Sept 17 and is expected to be completed by Aug 11, 2016.

"The project is expected to contribute positively to the future earnings and net assets per share of the group," it said.

YFG closed unchanged at 11.5 sen, with 705,100 units traded.

PDZ requests another extension to buy 20% of Efogen

PDZ Holdings Bhd has requested for another extension — its third time — to buy a 20% stake in oil and gas (O&G) vessel service provider Efogen Sdn Bhd, with the extension spanning 10 days to Sept 24.

In a filing with Bursa Malaysia yesterday, PDZ said the third letter of extension for the share acquisition agreement was mutually agreed upon by both the company and seller Johany Jaafar.

PDZ first announced in May that it plans to acquire 20% of Efogen from founder Johany for RM18 million in total. Currently, Johany holds 40% in Efogen, while the remainder is held by lawyer-turned-entrepreneur Tan Sri Abdul Rashid Abdul Manaf, who is also chairman of Eco World Development Group Bhd.

Container shipping firm PDZ said its entry into Efogen will be its first step into the O&G industry, with the vendor guaranteeing the consolidated net operating profit after tax and minority interest for Efogen’s financial year ending April 30, 2015, will not be less than RM11.74 million.

This article first appeared in The Edge Financial Daily, on September 18, 2014.

Friday, September 12, 2014

Talam Transform actively traded as restructuring on track (Edge)

Shares of Talam Transform Bhd were heavily traded as the most-active stock on Bursa Malaysia today, on indications that the property company is on track with its restructuring plan.

More than 61.282 million shares of Talam Transform were traded by the close of morning trading session today, compared to a mere 4 million shares done yesterday.

The property counter, which was traded between 11 sen and 12 sen, was unchanged at 11.5 sen in morning trades.

A local remisier said the high trading volume in Talam Transform shares indicated that investors were optimistic of the property firm’s transformation effort.

“There is a lack of fresh lead for the penny stocks in the market recently. But Talam Transform has been slowly paying back the loan to its creditors lately and that could be a positive sign that its restructuring plan is now on track,” he said.

On Aug 27, 2014, Talam Transform announced its plan to dispose a 58.68 ha freehold land in Serendah, Selangor, for RM28.8 million in cash.

In a filing with Bursa Malaysia, Talam Transform highlighted that the land is currently registered with a charge by TA First Credit Sdn Bhd, but the loan has just been fully settled and the group is in the midst of preparing for the discharge of the land.

Earlier on Aug 12, Talam Transform also said it had fully redeemed the sukuk worth RM150 million, which was issued by its wholly-owned unit Ample Zone Bhd in January 2005.

A quick check on Talam Transform’s financial statement showed that as at April 30, 2014, its non-current borrowings had been reduced to RM184.9 million, down from RM208.7 million as at end-January this year.

Meanwhile, its current borrowings are also lower at RM76.5 million, compared to RM81.8 million three months ago.