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Friday, August 19, 2011

Stocks to watch: Kimlun, Dialog, MISC, Tan Chong (Edge)

Stocks on Bursa Malaysia could see some downside pressure on Friday, Aug 19 due to the weaker global equities despite some upbeat news from several companies which reported stronger earnings.

World stocks fell on Thursday as renewed unease about a sluggish economic recovery prompted investors to cut exposure to riskier assets, though the safe-haven Swiss franc also dropped amid signs of further moves by the central bank to stem its rise.

European shares fell 2.7%, with worries about the U.S. economy and vanishing prospects of a quick fix for the euro zone's debt crisis wiping out the previous session's gains.

Stocks to watch on Friday include Kimlun Corporation Bhd, DIALOG GROUP BHD [], Tradewinds PLANTATION []s Bhd, DUTCH LADY MILK INDUSTRIES BHD [], Nestle (Malaysia) Bhd, Tan Chong Motor Corp Bhd, MISC BHD [] and Perdana Petroleum Bhd (formerly PETRA PERDANA BHD []).

Kimlun’s outstanding order book swelled to RM1 billion after the company secured its latest CONSTRUCTION [] contract worth RM54.43 million.

Its unit Kimlun Sdn Bhd had accepted the letter of award from Tanah Sutera Development Sdn Bhd to build 116 units of houses in Mukim Pulai, Daerah Johor Bahru, Johor.

The scope of works comprised of building construction using industrial building system method, and ancillary works for the houses.

Dialog proposed its first cash call from its shareholders to raise up to RM638 million under a rights issue with free warrants, on the basis of two rights shares and one warrant for every 10 shares held.

The corporate exercise would involve a renounceable rights issue of up to 398.73 million new shares of 10 sen each with 199.36 million free detachable warrants.

“Based on the indicative issue of RM1.60, the corporate exercise would raise up to RM638 million,” it said.

Higher prices and production of palm oil products pushed Tradewinds Plantations Bhd’s second quarter earnings 223% to RM90.08 million from RM27.84 million a year ago.

Its revenue increased by 73.6% to RM335.79 million from RM193.44 million while earnings per share were 14.32 sen compared with 4.42 sen.

MISC’s earnings fell to RM121.07 million in the quarter ended June 30, 2011 from RM427.98 million a year ago as it was affected by losses in the petroleum business as freight rates fell.
Revenue declined to RM3 billion from RM3.27 billion. Earnings per share shrank to 2.70 sen from 9.6 sen.

Tan Chong Motor's earnings fell 11.3% to RM56.46 million from RM63.65 million a year ago following slower sales due to the disruption in supplies from Japan due to the earthquake in the country.

However, it was upbeat about the remainder of the year as it was seeing stability and consistency in terms of complete knock down deliveries for the first time since the disaster in Japan.

Perdana Petroleum (formerly Petra Perdana Bhd) returned to the black with net profit of RM8.37 million in the second quarter ended June 30, 2011 compared with net loss of RM32.98 million a year ago.

Turnover rose 28% to RM73.3 million from RM57.4 million due to an improvement in the utilization of vessels and charter rates.

“The higher turnover enable the company topmost pre-tax profit of RM8.9 million compared with a loss of RM34.9 million a year ago,” it said. Earnings per share were 1.86 sen compared with loss per share of 11.08 sen.

Dutch Lady reported a 46.8% increase in earnings to RM27.77 million in the second quarter ended June 30, 2011 from RM18.92 million a year ago mainly due to higher sales, a favourable sales mix and a favourable exchange rate on imported materials.

Its revenue rose 8.1% to RM200.89 million from RM185.78 million due to higher demand for liquid and powder milk. Earnings per share were 43.30 sen compared with 29.56 sen.

Nestle (Malaysia) net profit for the second quarter ended June 30, 2011 rose 6.4% to RM106.55 million from RM100.15 million a year earlier, driven by both domestic and export sales.

Revenue for the quarter rose to RM1.16 billion from RM1.05 billion in 2010. Earnings per share was 45.44 sen while net assets per share was RM2.58.

Nestle declared an interim dividend of 55 sen per share, tax exempt under single-tier tax system.

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