Malaysia stock market and companies daily report (February 11, 2014)
February 11, 2014, Tuesday, 05:38 GMT | 00:38 EST | 10:08 IST | 12:38 SGT
Coastal Bags RM1.2b Contract
- Coastal Contracts secured a charter contract for a jack-up gas compression service unit worth approximately RM1.2 billion from a group of Mexican upstream contractor companies, which has in turn entered into a gas compression service contract with Petreoleos Mexicanos (Pemex). The jack-up will be used to handle sour gas production in the Cantarell Oil Complex, Gulf of Mexico.
- The jack-up will have the ability to manage sour gas, for injection into the reservoir the high content of associated gas to oil, helping to maintain reservoir pressure and maximise the exploitation of hydrocarbons.
- The contract was expected to commence by second half of 2015 for a period of eight years with extension option up to 12 years. Including this vessel sales order, Coastal’s order book is at a record RM2.5 billion.
Significance: The jack-up will be a key component to Pemex’s plans to boost natural gas production in Mexico. This charter will also contribute positively to Coastal’s revenue from 1H15 with greater mid- to long-term earnings visibility and lay foundation for a possible new profit driver.
Eco World Set To Launch 2 Townships In Iskandar
- Eco World Development Group is launching two township development projects, EcoSpring and EcoSummer, in Iskandar Malaysia in May, located in the Tebrau growth corridor. This was following the success of its flagship project EcoBotanic@Nusajaya launched last September.
- Tebrau is a property hotspot in Iskandar Malaysia due to its maturity and accessibility from all parts of Johor Bahru, making it a favourite among house buyers.
- The company is targeting different buyers for the project, which have different architectural features. EcoSpring has an indicative selling price of RM1 million onwards while EcoSummer’s is RM650,000. The company said that its next move is the Kota Masai area, as they have a large tract of land of about 404.7 hectares in that area, which has a good growth potential.
Significance: Both projects, on a 242.8 hectare site with a combined gross development value of RM5 billion, will keep the company busy for the next eight years, according to Eco World.
Genting Berhad’s Unit Ventures Into South Korea
- Genting Berhad’s 52-percent own subsidiary, Genting Singapore, has formed a 50:50 joint venture with Chinese property developer Landing International Development to build a US$2.2 billion (RM7.3 billion) casino resort in South Korea’s Jeju Island.
- The project, Resorts World Jeju, will comprise a casino, three luxury hotels, a shopping mall, theme park and residential facilities on a 2.3 million square metres site, where the casino is strictly for foreigners only.
- Jeju Island currently has eight established casinos with a combined market share of 10 percent of the entire South Korean gaming market. In the best case scenario, if the project succeeds in doubling the market share in Jeju, it would be an estimated US$200 million revenue per annum for the parties.
Significance: Growth may be limited by the government’s ban on local visitations. Hence, PublicInvest Research is “Neutral” on the latest development and maintain a target price of RM10.42 for Genting Berhad as earnings accretion may be minimal.