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Reports » Malaysia

Malaysia stock market and companies daily report (February 14, 2013)

February 14, 2013, Thursday, 05:41 GMT | 00:41 EST | 10:11 IST | 12:41 SGT
Contributed by Shares Investment

Hwang-DBS Rises On Share Sale Report
Hwang-DBS (M)’s share price rose in early trading yesterday following a report that major shareholders are keen on disposing their entire shareholdings in the company. As at mid-noon yesterday, Hwang-DBS gained 20 sen (2.57 percent ) to RM3.99, with 232,600 shares traded. According to local news, the company’s major shareholders, including the DBS of Singapore are in the final stage of appointing a foreign investment bank, possibly the Goldman Sachs Group as the adviser for the sale process. The disposal by the major shareholders is believed to have attracted interest from at least three financial institutions such as Affin Holdings, K&N Kenanga Holdings and AMMB Holdings. As an investment holding company, Hwang-DBS’ subsidiary, is principally involved in investment banking, stockbroking, management of unit trust funds, corporate funds and other related financial services. Its wholly owned subsidiary, Hwang-DBS Securities, is one of the largest stockbroking companies in Malaysia, with a Universal Broker status.
Significance: According to one source, the price tag being discussed around for a takeover is at 1.3 times price-to-book value. At that takeover price, this would value Hwang-DBS at RM1.22 billion or RM4.80 per share.

MRCB Rises Up On Deal With Nusa Gapurna
Shares of Malaysian Resources Corporation (MRCB) rose yesterday in early trade session following its RM729 million acquisition of private property developer Nusa Gapurna Development (Gapurna) and its other subsidiaries. MRCB suspended trading of its shares last Friday before the announcement was made. At 9.30 am yesterday, MRCB’s shares were trading at RM1.31 up 5 sen (4 percent) after hitting a high of RM1.35 earlier. With 3.09 million shares changing hands, it was the fourth most active counter across the exchange. “This move is positive, as it injects 33 acres of prime land with a total gross development value of RM5.7 billion and addresses MRCB’s depleting landbank for its KL Sentral project which will be fully completed in 2014. Also, its order book will be boosted by internal jobs,” said CIMB analyst Sharizan Rosely. CIMB Research has upgraded MRCB to a Neutral with a lower target price at RM1.35 down from RM1.50. The deal will inject 33 acres of new land into MRCB and increase MRCB’s order book by RM3.4 billion for in-house building jobs. The stock closed at RM1.29 with 10.98 million shares traded.
Significance: The acquisition will grant MRCB a first right of refusal and a call option to acquire Nusa Gapurna’s remaining landbanks. It also includes a cumulative 3-year profit guarantee of RM50 million by Nusa Gapurna from 2013-15.

Java Registers Net Loss Of RM6.2m In 2Q
Java recorded a net loss of RM6.17 million for the second quarter ended 31 December, 2012, compared to the net profit of RM28,300 a year ago. Its revenue dipped 38.6 percent to RM10.46 million from RM17.05 million in 2011. For the six months ended 31 December, 2012, the company’s net losses widened to RM12.86 million from net loss of RM20,200 a year earlier, on the back of RM20.92 million in revenue. Java attributed the poorer income for its immediate preceding quarter to the continued depressed market for timber products and fresh fruit bunches (FFB) prices, scarcity of logs supply, and lower FFB production. “Most of the losses were contributed by timber products segment which was mainly due to lower selling price,” said the company in a filling to the local burse. In the meantime, Java’s focus will remain on reducing costs and improving its bottom line. It noted that securing sales orders/new markets at better pricing and better sourcing of quality material would always remain the key concern for its timber products segment.
Significance: Java expects the performance of its core business, the timber products division would greatly influence its future prospect. On the other hand, the performance of its plantation segment is likely to improve via better yield, though the contribution from the segment is still minimal.