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Wednesday, June 15, 2011

Stocks to watch: United U-Li, MBM Resources, Aeon Credit, Kelington (Edge)

United U-Li Corp Bhd will be in focus again on Wednesday, June 15 after the company said it was mulling distributing part of the RM200 million from the sale of its three units to entitled shareholders.

Other stocks which could see trading interest are MBM RESOURCES BHD [], AEON Credit Bhd (M) Bhd and Kelington Group Bhd.

United U-Li said the intended utilisation of the RM200 million cash proceeds from the proposed disposal has not been finalised at this juncture.

“But may amongst others, be utilised for the working capital of the remaining subsidiaries post completion of the proposed disposal, the acquisitions of new businesses, as well as a portion of the cash proceeds being distributed back to the entitled shareholders,” it said.

The audited total net assets of the companies are RM102.25 million, it said.

MBM Resources will invest some RM250 million over the next five years to transform the group into one of the key automotive players in Malaysia and the region.

Managing director, Looi Kok Loon, said the capital expenditure would primarily be used to expand its manufacturing infrastructure and enhance its nationwide retail and service network.

"The company is also investing in new manufacturing facilities to cater to product line extensions and equip itself with vehicle assembly capabilities," he said, adding MBM planned to expand the car parts business and vehicle assembly. He said the company was actively seeking partners in vehicle assembly.

Aeon Credit’s net profit rose 45.3% to RM19.18 million in the first quarter ended May 20 versus RM13.20 million a year ago.

Its revenue rose by 22.5% to RM77.15 million from RM62.96 million. Its earnings per share were 15.99 sen versus 11 sen.

Aeon also plans to expand into India with an initial capital expenditure of US$7 million, which would be split between the company, its Japanese parent and a local partner based in India.

Managing director Yasuhiro Kasai said its Indian operations would only contribute to revenue three years after it commences while it might take seven years before this segment of the business contributes substantially.

He said 75% of the US$7 million investment would be provided by the company and its Japanese parent.

Kelington’s order book of RM122 million will be sufficient to sustain the group, which provides ultra high purity gas and chemical delivery systems, until 2012.

Its chairman and chief executive officer, Raymond Gan Hung Keng, said the company expected to increase the order book following the recovery in the semiconductor industry which recently saw an increase in capital expenditure.

“Furthermore, the increasing investments in the renewable energy sector in this region augur well for our group,” he said.

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