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Reports Malaysia

Malaysia stock market and companies daily report (May 29, 2014)

May 29, 2014, Thursday, 04:40 GMT | 23:40 EST | 08:10 IST | 10:40 SGT
Contributed by Shares Investment

Hap Seng Plans RM1b Worth Of Projects

- Hap Seng Consolidated is planning to beef up its property unit, to launch several property projects mainly in prime locations in the Klang Valley with total gross development value (GDV) of more than RM1 billion over the next two years.

- Currently, Hap Seng’s land bank stands at 2,350 acres, with 235 acres across Klang Valley and the company is also aiming to increase its land bank in Klang Valley.

- Hap Seng has allocated RM300 million in capital expenditure for the group operations this year with a number of projects in the pipeline such as a high-end residential project with RM900 million GDV this year.

Significance: Hap Seng’s property segment has an unbilled sales of RM500 million and continues to expect high-end residences to receive strong uptake despite the cooling measures. The company also noted that it may spin off its property unit to a separate listed entity in future.

Genting Plantations’ 1Q14 Profit Doubles

- Genting Plantations’ net profit for the first quarter ended 31 March 2014 more than doubled to RM101.1 million from RM44 million in 1Q13.

- This was despite a marginal 3 percent dip in revenue to RM332.9 million in 1Q14, as lower sales in the property segment outweighed the increased contribution from the plantation segment, which benefited from stronger palm product selling prices and higher fresh fruit bunch production in Indonesia.

- Palm product selling prices maintained their uptrend with crude palm oil price increasing 16 percent year-on-year (y-o-y) while palm kernel prices were up 71 percent y-o-y and even reached a peak of RM2,368 per tonne in March.

Significance: Genting Plantations expects its performance going forward to continue to be influenced by external forces such as world palm oil price movements, weather changes and so on. However, it expects growth in Indonesian production due to its progress to higher yielding brackets and additional plantings coming to maturity.

Carlsberg’s 1Q14 Net Profit Up 3.6% Y-o-Y

- Carlsberg Brewery Malaysia’s revenue fell 5.3 percent year-on-year to RM445.9 million in 1Q14, due to a decline in its Singapore operations as a result of lower consumption due to a 25 percent rise in liquor excise duty in February 2014.

- However, due to improved Malaysia operations on effective consumer marketing activities and cost efficiency programmes which improved price and produce mix, net profit inched up 3.6 percent to RM52.3 million in 1Q14.

- Underpinned by an expanding portfolio of premium and super-premium beer brands, revenue is expected to see growth despite the challenging operating environment.

Significance: According to Kenanga Research’s report dated 28 May, Carlsberg’s share price appears to have bottomed out with current dividend yields above its two-year historical average of 4.6 percent. Going forward, Kenanga believes that the stock lacks catalysts.