Reports » Malaysia

Malaysia stock market and companies daily report (March 05, 2013)

Contributed by Shares Investment

DiGi To Beat Its Peers
DiGi.Com (DiGi) remains analysts’ top pick despite its rival, Telekom Malaysia (TM) recording the highest growth rate in revenue among its peers in the latest quarterly results. TM posted a 9.2 percent revenue growth for the FY12 compared to FY11, which is above analysts’ expectations and beats Axiata Group, Maxis and DiGi. Nonetheless, analysts are still not convinced of the dominant fixed line player being able to sustain its pace of growth. Instead, analysts prefer DiGi as they believe the cellular service provider may post higher revenue in the next few quarters via new customer recruitment, given its improved and stable network connections. Some analysts however, are more inclined towards Celcom as the cellular service provider is expected to outshine other players by virtue of its stated key performance indicator of 7.6 percent in revenue growth for this year. For FY12, DiGi’s net profit dipped 3.88 percent to RM1.21 billion at the back of a 6.66 percent increase in revenue to RM6.36 billion.
Significance: According to RHB Research, DiGi’s management is to explore the possibility of the business trust structure. It could act as a re-rating catalyst, due to the potential of paying dividends over and above its reported earnings. The research house has maintained its ‘Neutral’ call on DiGi with an unchanged fair value of RM5.10.

CBSA Surged To Historical High On Offer Of Its Electronic-Commerce Division
CBSA shares surged to its all-time high following the proposed disposal of its electronic-commerce division to a private-equity group for RM120 million cash. Yesterday, the counter jumped to its highest of 49 sen since the technology company’s listing on the local bourse on 20 April 2004. Its share price hovered between 46.5 sen and 49 sen, before closing at 46.5 sen with 9.6 million shares traded. Last Friday, CBSA received an offer from Majujaya 2013 to acquire CBSA’s search and advertising unit for RM120 million cash. Private equity firm KV Asia Capital manages the KV Asia Capital Master Fund I, which in turn is the ultimate shareholder of Majujaya. CBSA’s search and advertising operations include the provision of Internet platforms to facilitate the expansion of its client’s businesses. Besides the search and advertising unit, CBSA also offer solutions for radio-frequency identification, supply-chain management, and electronic security.
Significance: Hwang-DBS Vickers Research had earlier expected the stock to attract the attention of the market as the offer price of RM120 million is higher than CBSA’s market capitalisation of around RM114 million.

UMS Falls 25 Percent After Previous Week’s Surge
Shares of UMS Holdings plunge by as much as 27 percent yesterday to become the top loser following its 38 percent rise over two days in the middle of last week. At 3.03 pm, the stock fell 25.4 percent to RM1.91 on trades of 119,300 shares after falling to as low as RM1.86 per unit in yesterday’s morning session. “It could be profit-taking after the surge in company share last week. As the stock is not hotly traded, and there was not much follow-through after it surged, it has to fall and go back to square one,” said a dealer. The stock had advanced by a total of 38 percent to RM2.56 from 26 to 27 February, after the release of first quarter results which posted a small increase in revenue. The company also announced a final dividend of 6 percent and a special dividend of 4 percent in respect of the financial year ended 30 September 2012.
Significance: UMS, whose share is normally non-active, is primarily an investment holding company. For first quarter ended December 2012 in its current financial year, it registered a net profit of RM7.64 million compared to RM6.92 million of previous year quarter. Revenue rose to RM22.96 million, from RM21.33 million.