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Reports Malaysia

Malaysia stock market and companies daily report (July 16, 2014)

July 16, 2014, Wednesday, 05:18 GMT | 00:18 EST | 08:48 IST | 11:18 SGT
Contributed by Shares Investment

MSM Malaysia Aims To Be The World’s Top Three Sugar Makers By 2016

- MSM Malaysia is on an expansion drive to become the world’s top three sugar makers by 2016. Instead of growing organically, MSM will embark in M&A as it claims to be the faster option.

- MSM declined to reveal its potential takeover targets but said that they are from Europe and Asia and one of them churns out a net profit of RM42 million a year. If the takeovers are successful, you could see MSM and its partners tapping into the Russian Market.

- MSM said that it plans to gain control of the entire supply chain, from ship charters to warehousing. It aims to do so by setting up a trading firm in Dubai and acquiring charter companies in Malaysia.

Significance: If the takeovers are indeed successful, MSM could control 13 million tonnes of the world’s sugar supply, propelling MSM to become the top three sugar makers. Once the firm becomes a global player, it will be the chief refined sugar supplier in the region

RHB Research Maintains Buy On Tambun Indah

- Following the news of Tambun Indah’s acquisition of 209.54 acres of land in Penang, RHB believe that the property developer is on track to be the largest listed landbank owner in Penang mainland.

- With the recent acquisition, Tambun Indah’s landbank in Pearl City will increase to almost 800 acres with an estimated gross development value of RM 4.4 billion.

- RHB sees potential upside in total GDV as new player such as IJM Land and Eco World may launch products in Simpang Empat/Jawi at a higher price due to their higher land cost.

Significance: Lastly, this acquisition has eased investors concerns of a depleting landbank and RHB Research has gave it a fair value of RM 3.

Hovid Looking To Export To Emerging Markets And The Middle East

- Hovid is looking to export to emerging markets and the middle east which it has yet to enter. RHB Research has estimated that its export contributions may rise to 56 percent in FY16 should this prove to be successful.

- Backed by growing affluence, health awareness and healthcare expenditure in the markets that it operates, RHB anticipates its net profit will grow at a CAGR of 18.5 percent.

- Additionally, RHB also sees the expansion of healthcare services nationwide by both public and private hospitals, translating into increasing demand for generic drugs.

Significance: RHB Research likes Hovid for its robust revenue pipeline, strong and wide exposure to the export market and decent return on equity of 12 to 13 percent in FY14 and FY15.