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Reports Malaysia

Malaysia stock market and companies daily report (June 30, 2014)

June 30, 2014, Monday, 04:12 GMT | 23:12 EST | 07:42 IST | 10:12 SGT
Contributed by Shares Investment

Ire-Tex To Produce High-Brightness LED Tubes

- Ire-Tex Corporation will invest RM25 million in subsidiary, Zoomic Automation, over a two-year period to produce high-brightness energy efficient light-emitting diode (LED) tubes.

- The group has clinched a contract worth RM150 million for the next three years from a local LED company that aims to sell these tubes to Japan and Southeast Asia.

- Zoomic will design and assemble these LED tubes using LED components sourced from multinational corporations and will further test the tubes at its plant in Bayan Lepas.

Significance: Zoomic’s rich network in its industrial automation business would enable diversification of its earnings away from its core packaging material manufacturing business.

NTPM Invests RM20m In A New Plant In Nibong Tebal

- Nibong Tebal Paper Mill Holdings (NTPM) is to invest RM20 million for a new plant in Nibong Tebal to expand its personal care product business to produce diapers, facial cottons and sanitary napkins.

- With its expansion, the group aims to increase its market share for diapers, facial cotton and napkins in the central region of the country where the purchasing power is higher.

- The group expects to face headwinds due to the rising cost of doing business and greater competition from similar range of products which might erode margins.

Significance: Moving ahead, NTPM aims to increase its sales and presence in overseas markets with better penetration into the Indo-China market by appointing more distributors and setting up new sales office.

Maxis To Stop Practice Of Borrowing To Part-Fund Dividends

- Maxis has signalled a possible dip in payouts as it intends to stop its practice of borrowing to part fund its dividend payout from 2015 onwards and has indicated that it would prefer to make its dividend payments solely from free cash flow it generates.

- The group commented that despite its dividend policy of 75 percent of net profit, it has actually paid out twice that amount due to its strong balance sheet that supported higher debt.

- Maxis aims to operate at an optimal two times net debt to EBITDA level of debt it is comfortable with. Since it is reaching that amount, the group will no long take on more debt to fund its dividend payout.

Significance: Alliance Research has expected Maxis to pay about RM0.30 a share for dividends in 2015, based on its projected free cash flow.