Reports » Malaysia

Malaysia stock market and companies daily report (February 07, 2013)

Contributed by Shares Investment

Public Bank’s Achieves Nearly RM1b Growth In Earnings For Q4
Public Bank’s earnings rose 8.6 percent to RM992.5 million at the back of 9.28 percent increase in revenue to RM3.63 billion for the fourth quarter ended 31 December, 2012. Earnings per share had improved to 28.34 sen from 26.08. It proposed a dividend of 30 sen a share. For the financial year ended 31 December, 2012, its earnings rose 5.02 percent to RM3.87 billion from RM3.68 billion a year ago. Its revenue increased by 10.2 percent to RM14.058 billion from RM12.756 billion. According to the company’s founder and Chairman Tan Sri Teh Hong Piow, the group’s balance sheet position is holding strong and continues to support loan growth. Gross loans grew by 11.3 percent during the year to RM198 billion as at the end of 2012, with domestic loans increasing at a higher rate of 12.5 percent over the same period. He said loan growth was funded mainly by customer deposits which grew 12.3 percent, with domestic customer deposits up by 13 percent in 2012. Loan-to-deposit ratio was at 87.1 percent as at the end of 2012.
Significance: According to the Chairman, the comparative pre-tax profit and net profit for 2011 were restated upwards by RM267 million and RM200 million due to a result of the retrospective application of MFRS 139. However, excluding the effects of such restatement, the group’s pre-tax profit and net profit for 2012 increased by 10.7 percent and 11.1 percent, respectively.

Paramount Signs Two Private Bonds Programme Worth RM550m
Paramount Corporation (PCB) inked two private bond programmes worth RM550 million yesterday with three banks. They are Hong Leong Investment Bank, OCBC Bank and RHB Investment Bank. According to its Group Chief Executive Officer, Chan Say Yeong, the deals consist of RM350 million Sukuk Ijarah Programme and a RM200 million Private Debt Securities programme, which allows PCB to issue perpetual bonds. The perpetual bonds is to provide PCB access to capital to fund its growth plans. The Sukuk Ijarah Programme on the other hand will help finance the building of the new KDU University College campus at Ultrapolis in Glenmarie, Shah Alam. “The RM200 million perpetual bond has been fully subscribed by Great Eastern Insurance, which subscribes RM100 million at fixed rates and RHB Bank, which subscribes RM100 million at floating rates.” “The first phase of the Sukuk Ijarah Programme of RM220 million has also been fully subscribed by Hong Leong Bank, OCBC Al-Amin and RHB Islamic Bank,” he told reporters after the signing ceremony yesterday. Going forward, Chan said the company plans to launch its Cyberjaya property project and first phase of its serviced apartment project at the Ultrapolis in the second quarter of this year.
Significance: According to Chan, the cost of funds would range from 6.25 percent to 6.5 percent per annum, which is below the current cost of equity. There is no negative carry, as the company will have two years to utilise the funds as and when the need arises.

Hartalega A ‘Buy’ Says HLIB Research
Hartalega Holdings received a ‘buy’ call from Hong Leong Investment Bank Research (HLIB Research) at a target price (TP) of RM5.16. HLIB Research highlighted that Hartalega has a dominant position in the nitrile glove market and carries a high return on equity (ROE) and net profit margins. “In the event of a price war, Hartalega’s earnings will be the least affected and the company is shielded by its high profit margins,” it added. Nonetheless, the research house noted that the likely risks, however, would be the delays in capacity expansion plan, surge in nitrile latex prices and shift in demand to natural latex gloves from nitrile gloves, if prices of natural latex were to fall significantly below nitrile latex. On the other hand, HwangDBS Vickers Research has maintain a ‘hold’ call on the rubber glove maker at a higher TP of RM4.80, from RM4.70 previously, after factorised its strong fundamentals, highest ROE and operating margins in the sector. It noted that the next re-rating catalyst would be the strong earnings traction arising from improving efficiency through deeper research and development efforts along with faster line speeds.
Significance: Hartalega expects the global demand for nitrile rubber gloves continued to grow at a high rate of over 20 percent due mainly to switching momentum from latex to nitrile rubber gloves. However, margin will be lower as the market size enlarges with more competitors.