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Reports Malaysia

Malaysia stock market and companies daily report (March 03, 2014)

March 3, 2014, Monday, 06:32 GMT | 01:32 EST | 11:02 IST | 13:32 SGT
Contributed by Shares Investment

Sealink Int’l Builds 9 Vessels; Capitalises On Oil And Gas Boom

- Sealink International, a specialist in the construction of offshore marine support vessels for the oil and gas industry, is building another nine such vessels costing some RM200 million to meet rising demand.

- In view of the renewed optimism in the oil and gas industry, the group has embarked on a new shipbuilding programme with a budget of about RM327.7 million. Sealink owns two shipyards in Miri that have a combined capacity to construct up to 17 vessels a year.

- The group is currently studying new designs on vessels to be built in line with the drastic shift in trend adopted by the shipbuilding division three years ago to build newer and larger vessels. It is modernising its fleet by disposing off older and smaller vessels.

Significance: Sealink International aims to capitalise on the heightened capital expenditure of oil majors as well as national oil companies. According to Ting Hui, Sealink’s corporate affairs manager, there is heightened deep sea exploration going on and a shortage of certain types of vessels for the oil and gas industry.

STM Pays Out More Dividend; RHB Maintains “Buy”

- Syarikat Takaful Malaysia, which saw its net profit rose by 37 percent in 2013, expects earnings this year to be further boosted by its aggressive cash-back payout policy and higher take up of its products by corporations and multinationals.

- For 2013, STM handed RM30 million in cash back payouts driven by its ability to offer customers a 15 percent cash back should they make no claims during the coverage period. In a bid to establish a strong foothold in the local insurance and takaful sector, the company would continue to promote cash back payouts.

- “The fact that insurance penetration in both the conventional and takaful sectors was still low meant there was plenty of room for organic growth to chalk up another year of healthy growth,” noted STM’s group managing director, Datuk Mohamed Hassan Kamil.

Significance: STM proposed a dividend of RM0.30 for 4Q13 compared with RM0.10 payout previously in 4Q12. RHB Research Institute said STM’s earnings for FY13 beat the house and consensus estimates, due to higher agency fee income recognition, and improved claims and expense ratios. The research house maintains a “Buy” call on the firm.

Kenanga Maintains “Underperform” On KPJ Healthcare, Revise Target Price To RM2.80

- Kenanga Investment Bank cuts its net profit forecast for hospital operator KPJ Healthcare and reduced the target price for the stock following the latter’s weak financials announcement.

- Last Friday, KPJ released its FY13 results where net profit came below Kenanga’s expectation at only 89 percent of its full-year net profit forecast. The figures were, however, within consensus estimates.

- Full-year net profit fell to RM102.5 million from RM140 million a year earlier. Revenue was higher at RM2.3 billion versus RM2.1 billion. Kenanga said KPJ’s earnings could be further dampened by the opening of the new hospitals this year in Sabah, Muar and Rawang.

Significance: Kenanga Investment Bank cuts KPJ Healthcare target price by 15.9 percent to RM2.80 but maintained the “Underperform” rating for the stock. The new target price compares with RM3.33 previously.