Reports » Malaysia

Malaysia stock market and companies daily report (February 01, 2013)

Contributed by Shares Investment

Mudajaya Bids For RM5b Worth Of Projects
Mudajaya Group is bidding for power and infrastructure projects worth more than RM5 billion in Malaysia. “The bids are all in various stages. Being one of the large contractors in the country, we are in the position to secure some contracts,” said managing director and chief executive officer Joseph Anto. The group’s construction order book stood at RM2.8 billion as at 30 September 2012. Last October, Mudajaya formed a consortium with international players including Alstom and Japan’s Sumitomo to bid for a 1,300 megawatt (MW) gas-fired power plant for PETRONAS’ RM60 billion Refinery and Petrochemical Integrated Development (RAPID) in Pengerang, Johor. The group noted that by using its indicative rate of US$1.5 million (RM4.6 million) per MW, the contract could be worth US$1.95 billion (RM5.85 billion). With regard to the progress of its 1,440MW coal-fired independent power purchase project in Chhattisgarh, India, the construction will commence from the second half of this year. Anto expects some contribution from the power plant this year, but the bulk of it will flow from next year. For the nine months ended 30 September 2012, Mudajaya’s profit rose to RM189.9 million from RM164.5 million recorded a year earlier. Its revenue increased by 47.5 percent year-on-year to RM1.35 billion compared with RM916.4 million previously.
Significance: Looking forward, Mudajaya plans to tender for the key packages of the RM6 billion West Coast Expressway project. The group believes that it would benefit from the Economic Transformation Programme (ETP) projects, which include Mass Rapid Transit (MRT), power plants, highways, and infrastructure projects.

Poh Kong Hopes To Match Its FY12’s Strong Performance
Poh Kong Holdings is hoping to achieve its “excellent 2012 results” for its FY13. Poh Kong registered a 20 percent surge in its revenue for FY12 at RM830.1 million, compared with RM692.4 million, the previous year. Its net profit was RM51.5 million, compared with RM41.2 million for FY11. For its first quarter ended 31 October 2013, the company’s earnings and revenue slipped to RM11.7 million and RM194.7 million, respectively; compare with 1Q12 of RM17.7 million and RM230.6 million. Head of corporate affairs Margaret Hon noted that the poorer results were attributed to a slowdown in demand for gold investment products, such as gold coins, bullions and bars, which is a trend observed globally. Nonetheless, Hon foresees a five percent growth in the company’s earnings upon the internal restructuring exercise, which is expected to be completed by the year-end. Its current market share is between 15 percent to 16 percent. Poh Kong will be issuing a first and final single-tier dividend of 1.5 sen per share.
Significance: Poh Kong plans for further expansion this year, with a target of 107 stores to be opened by the Chinese New Year. There will a store opening today and another three to five stores in various locations across Peninsular Malaysia by end-2013. The group is also looking to expand into Sabah and Sarawak within the next three years.

RAM Ratings: Malaysia Economy To Grow 5.3 Percent In 2013
RAM Ratings expects Malaysia’s economy to grow by 5.3 percent in 2013 and hit 5.8 percent in 2014, driven by demand and recovery of the external environment. On Thursday, The Economic Outlook report issued by the ratings agency forecasted strong growth in domestic private consumption. This is based on favourable labour-market conditions, supported by various government initiatives and hand-outs. As for global conditions, RAM Ratings predicts a gradual recovery this year “as policymakers in systemically important economies adopt an accommodative stance in an attempt to combat their respective structural deficiencies”. RAM Ratings also expects private investment to expand further, aided by a recharged business environment and relatively accommodating interest rates. “While fiscal policy remains supportive of economic activity, the growth of public expenditure should moderate to meet the government’s longer-term fiscal-consolidation objectives and as the ‘public-private partnership’ method of financing has assumed a larger role in funding various development projects,” it said. Furthermore, the ratings agency also expected Malaysia’s exports to improve, in tandem with the recovery of other advanced economies.
Significance: RAM Ratings expects domestic monetary and financial conditions to remain relatively stable this year. In response to the consistent domestic credit growth with longer-term inflationary pressures that begin to develop, it perceives that Bank Negara Malaysia was likely to raise the overnight policy rates by 25 to 50 basis points this year.