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Reports Malaysia

Malaysia stock market and companies daily report (August 12, 2014)

August 12, 2014, Tuesday, 05:54 GMT | 01:54 EST | 10:24 IST | 12:54 SGT
Contributed by Shares Investment

Mah Sing To Develop RM7.5b Project In Seremban

- Mah Sing Group will develop its biggest freehold township, at a gross development value (GDV) of RM7.5 billion with its acquisition of 960 acre land in Seremban.

- Mah Sing is proposing a gated guarded lifestyle township with a clubhouse and commercial components to complement its offerings of terrace homes, superlink homes, with a selection of semi-detached homes and bungalows for those looking for an upgrade.

- With this, Mah Sing’s landbank would increase by 35 percent to 3,670 acres with a total GDV and unbilled sales of more than RM41 billion. Additionally, the company mentioned that the township is expected to complete within eight years.

Significance: CIMB Research viewed this acquisition positively as they reported that the land price was fair at 4.8 percent of GDV and Seremban is a new growth region.

Petronas Chemicals 2Q14 Profits Fell 42% To RM555m

- Petronas Chemicals Group’s earnings fell 42.1 percent year-on-year to RM555 million in 2Q14, underpinned by lower volumes and prices of fertilizers and methanol.

- In 2Q14, Petronas Chemicals undertook heavy maintenance and several statutory turnarounds at a few of its plants compared to only one turnaround in 2Q13, therefore, the group’s plant utilisation was at 76 percent, compared to 83 percent from a year earlier. Consequently, both production and sales volumes were affected.

- Petronas Chemicals declared interim dividends of RM0.08 a share, to be paid on 12 September.

Significance: Petronas Chemicals will continue to undertake statutory turnaround maintenance activities at its smaller methanol plant in 3Q14, marking the end of the heavy statutory turnaround cycle. Going forward, with an improved plant maintenance program and supplier relationship management, the group aims to achieve better plant and sales performance.

MAS Capacity Cuts May Hurt Brahim

- Brahim’s Holdings may be impacted as Malaysian Airline System (MAS) decide to cut capacity on its long haul routes; shorter routes would only require loading of two sets of meals on board unlike the need for two to three sets of meals for long-haul routes.

- Brahim’s annual billings to MAS are about RM260 million, while its billings to non-MAS clients are around RM80 million to RM100 million.

- According to Hong Leong Investment bank, a 10 percent, 20 percent or 30 percent capacity cut may, result in Brahim’s FY15 profit after tax and minority interests to be reduced to RM33.5 million, RM29.7 million and RM25.9 million respectively.

Significance: Massive cost-cutting initiatives are in the works for MAS as Khazanah Nasional intends to take the airline private. For Brahim to mitigate this situation, it needs to ink more deals with other foreign airlines.