Reports » Malaysia

Malaysia stock market and companies daily report (February 19, 2013)

Contributed by Shares Investment

Mix Outlook For Cement And Steel Players
CIMB Equities Research is expecting a mixed performance for the upcoming fourth quarter of 2012 results for both cement and steel players under its coverage. The research house believes Ann Joo’s top-line performance is likely to be dampened by depressed selling prices for long steel products. “We expect a quarter-on-quarter decline in total revenue due to the impact of steel wire rod dumping from China. There could be another round of inventory write-down and continued losses for the group’s blast furnace,” it noted. On the cement side, domestic sales volume is expected to remain robust for cement players. However, CIMB Research believes Lafarge Malayan Cement’s performance would be affected by a slowdown in construction activities since October last year, due to the rainy season and pricing pressures arising from Hume Cement’s new capacity. Whereas for Tasek Corporation, its cement division is expected to continue to deliver good results and offsetting the losses for its ready-mix division, which was hit by the shutdown of its batching plants as well as higher aggregate and sand costs.
Significance: CIMB Research believes 2012 would be a fairly good year for cement and steel players. The sector should continue to perform well, underpinned by the award of major jobs. Nonetheless, the potential hiccup could be the pending approval of other major projects until the general election has taken place.

Apex Healthcare’s Orthopaedic Venture To Improvement Bottom Line
Apex Healthcare’s venture into orthopaedic devices manufacturing is likely to contributed significantly to its bottom line over the mid to long term, said OSK Retail Research. It further explained that this was attributable to the growing elderly population and a steady rise in the diagnosis of musculoskeletal disorders. The joint venture (JV) entity, ABio Orthopaedics, is a contract manufacturing business for surgical-grade orthopaedics devices, components and surgical instruments. Apex’s wholly owned unit ABio Marketing holds 40 percent stake in the new JV entity while its JV partner, November Union holds the remaining 60 percent. OSK highlighted that Apex provided the JV entity a RM5 million interest-bearing loan for the purpose of plant setup and equipment installation, as it is set to secure its first contract from a local partner. “The proposed plant will be located in Penang and is slated to start operation in 1HFY13,” said OSK.
Significance: OSK believes the new venture will benefit from the country’s growing orthopaedic market as the government commits to boost the healthcare sector under the Economic Transformation Plan, and would become Apex’s third growth engine.

Pharmaniaga Records Q4 Net Loss Of RM7.9m
Healthcare solutions provider, Pharmaniaga registered a net loss of RM7.93 million in the fourth quarter ended 31 December 2012, compared with a net profit of RM11.94 million a year earlier. The company attributed the poorer results to the impairment of goodwill and amortisation of rights to supply in relation to acquisition of Idaman Pharma Manufacturing. Pharmaniaga recorded RM482.4 million of revenue, an increase of 31.2 percent from RM367.78 million a year ago. The higher sales volume was contributed by the increased demand from both government and private sector, coupled with consolidation of Idaman Pharma Manufacturing. Meanwhile, the company has proposed a share split involving the subdivision of every one existing ordinary share of RM1 each into two ordinary shares of 50 sen each. After the share split, Pharmaniaga will embark on a bonus issue of new ordinary shares on the basis of one bonus share for every 10 subdivided shares held.
Significance: Going forward, Pharmaniaga will continue to make progress on its strategy particularly through increasing the sales exposure to growth business, notably private sector market and delivering a step-change in output from research and development.