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Reports Malaysia

Malaysia stock market and companies daily report (March 17, 2014)

March 17, 2014, Monday, 11:38 GMT | 08:38 EST | 16:08 IST | 18:38 SGT
Contributed by Shares Investment

Top Glove Reiterates Stand On China

- Despite incurring an operating loss of RM5.2 million in China during 1Q14, Top Glove Corp intends to maintain its presence in China, given the country’s huge market which is supported by a population of 1.4 billion people.

- The decision to scale back operations in China by shutting down one factory is to curb losses and does not mark the beginning of an eventual exit from the market, the company quoted further that the loss was mainly attributed to a new Chinese government policy which limits the amounted coal used as energy.

- The company has elaborated that it is in the midst of consolidating its operations in China by shifting operations from Factory 8 in Zhangjiagang into Factory 15 in Xinghua, which leaves Factory 15 to be the only operating facility in China.

Significance: Post consolidation, Top Glove expects to break even and eventually for its China operations to start contributing positively again, while the shutdown of Factory 8 leaves the company with a total of 25 factories.

Mah Sing To Launch RM4b Projects In 2014

- Mah Sing Group targets to launch projects with a gross development value (GDV) of RM4 billion this year in the Klang Valley, Penang, Johor and Sabah. The company stated further that this consists of projects with a GDV of RM2.3 billion in the Klang Valley, RM294 million in Penang, RM1.1 billion in Johor and RM285 million in Sabah.

- The company is placing its focus on four main hotspots in Malaysia, namely Klang Valley, Iskandar Malaysia in Johor, Penang and Kota Kinabalu in Sabah. The company is also planning to explore other areas such as Seremban in Negeri Sembilan and Ipoh.

- During an extraordinary general meeting held recently, shareholders of Mah Sing voted in favour of a 1,352 acre land acquisition in Pasir Gudang with an expected GDV of RM5 billion for RM411.2 million.

Significance: Mah Sing is targeting a record-high 20 percent growth in sales this year to RM3.6 billion from RM3 billion in 2013. Currently, the company has 47 projects in Malaysia with nine completed and 30 ongoing projects.

1MDB Wins Tariff Rate For Solar Plant

- 1 Malaysia Development (1MDB) has secured a tariff rate between a range of RM0.40 and RM0.46 per kilowatt hour with the Malaysia Government.

- Despite rates being lower than existing tariff for electricity generated by solar plants, it cannot be determined if that is the best rate with present technology given that this deal is the result of a directly negotiated exercise.

- The planned 50 megawatt solar farm to be built in Kedah is by far the largest in the country. Further to this, the agreement is expected to be announced during US President, Barack Obama’s planned visit to Malaysia next month.

Significance: Seda, the government related entity overseeing Malaysia’s renewable energy push had devised feed-in Tariff (FiT) rates that enable companies and house owners to produce and sell renewable energy to the country’s electicity grid. As 1MDB’s scheme does not come under Seda’s FiT, the company would have to compete for grid priority to generate power.