UEM Land is a strong candidate for inclusion as an index component of the FBM KLCI being the largest property stock on Bursa Malaysia by market capitalisation and landbank size now.
Despite the company's rather premium valuation against its peers, the stock's potential inclusion into the barometer and positive news flow from Iskandar region would give the boost for an upward rerating.
The acquisition of Sunrise which was completed in February 2011, boosted UEM Land's market capitalisation to about RM11 billion.
Once included as one of the index components, it will be the only pure property stock in the index.
It will raise the company''s profile and visibility, and subsequently justify its premium valuation given that the FBM KLCI top 30 stocks are typically used as a benchmark portfolio.
UEM Land is the flagship company for the real estate investment and development businesses of UEM Group, which is a wholly-owned by Khazanah Nasional, the government's investment holding company.
UEM Land was a good proxy to the government's strategy to propel the domestic economy towards high income status, particularly under the Economic Transformation Programme.
Due to its size and the growth prospects, the company's liquidity was the highest among the listed property stocks as foreign and local institutional interest on the stock had picked up.
Saturday, October 22, 2011
Friday, October 21, 2011
Sarawak Plantation
Salcra is understood to be eyeing a 30.3% stake in Sarawak Plantation now held by Cermat Ceria Sdn Bhd.
Cermat Ceria’s shareholders are Tapak Berigin Sdn Bhd (46.2%), Datuk Abdul Hamed (19.9%), Datuk Hasmi (19.7%), Mohamad Bolhair (8.4%) and Perspektif Prestij Sdn Bhd (5.8%). The second largest shareholder is the State Financial Secretary of Sarawak with a 25.4% stake.
Tapak Beringin is close associates of Sarawak Chief Minister Taib Mahmud. Lately, there have been several boardroom changes at Sarawak Plantation, indicating that Tapak Beringin may be letting go of their grip in the company.
There could be a premium for the controlling block.
Sarawak Plantation had a net tangible assets per share of rm1.82.
Although Salcra is a unit of the state government, a MGO may not be triggered.
It is unclear what Salcra has in mind in buying up the controlling block in Sarawak Plantation.
The board of Salcra is made up of mainly state officials, some of whom is close associated to chief minister of Taib.
Tapak Beringin is close associates of Sarawak Chief Minister Taib Mahmud. Lately, there have been several boardroom changes at Sarawak Plantation, indicating that Tapak Beringin may be letting go of their grip in the company.
There could be a premium for the controlling block.
Sarawak Plantation had a net tangible assets per share of rm1.82.
Although Salcra is a unit of the state government, a MGO may not be triggered.
It is unclear what Salcra has in mind in buying up the controlling block in Sarawak Plantation.
The board of Salcra is made up of mainly state officials, some of whom is close associated to chief minister of Taib.
Thursday, October 20, 2011
Ramunia
It is said to be still searching for a compatible partner despite the number of prospective players. According to sources, it is now eyeing some of UMW Holdings Bhd’s O&G assets. But it is not certain which assets Ramunia is looking at specifically.
LTH holds a 25.17% stake in Ramunia as at Dec 2010.
However, UMW official denied that this was the case.
As at Oct 2010, it had cash reserves of about rm130 million, with almost no debts. Since then, it has been on the lookout for core assets.
Ramunia has a July 13, 2011 deadline to submit a regularization plan to the regulators. Things have been looking up over the past years (2010) following a push towards more local O&G activity, as well as LTH’s efforts to facilitate deals with other O&G players.
In 2010, Ramunia has signed several deals, including one with Coastal Contracts Bhd and the acquisition of a fabrication yard in Pulau Indah from Oilfab Sdn Bhd for rm83.3 million earlier 2011. It has also been reported that Ramunia is in talks with Coral Alliance Sdn Bhd, but nothing has come of it yet. The companies see synergistic value between Coral Alliance’s hook up and topside maintenance business and Ramunia’s oil rig fabrication activities.
Industry observers say Ramunia is trying to position itself as a major O&G player as part of its plan to have its PN17 status removed. The plan could include UMW’s three jack up rigs.
With the rigs, it could venture more deeply into marginal oilfields. It has already signed an agreement with two firms. It could also utilize Coastal’s Sandakan yard for its operations since the parties have signed a MOU.
Another view is that it teamed up with both Coastal and Coral Alliance, either in a full merger or as a JV company, it could become a sizeable fabricator. Ramunia is also said to be looking at yards in Indonesia .
Ramunia’s Fabricators Sdn Bhd is one of the few major fabricators in Malaysia that has been licensed by Petronas. The company has expressed that it would like to position itself as an integrated EPIC contractor.
LTH holds a 25.17% stake in Ramunia as at Dec 2010.
However, UMW official denied that this was the case.
As at Oct 2010, it had cash reserves of about rm130 million, with almost no debts. Since then, it has been on the lookout for core assets.
Ramunia has a July 13, 2011 deadline to submit a regularization plan to the regulators. Things have been looking up over the past years (2010) following a push towards more local O&G activity, as well as LTH’s efforts to facilitate deals with other O&G players.
In 2010, Ramunia has signed several deals, including one with Coastal Contracts Bhd and the acquisition of a fabrication yard in Pulau Indah from Oilfab Sdn Bhd for rm83.3 million earlier 2011. It has also been reported that Ramunia is in talks with Coral Alliance Sdn Bhd, but nothing has come of it yet. The companies see synergistic value between Coral Alliance’s hook up and topside maintenance business and Ramunia’s oil rig fabrication activities.
Industry observers say Ramunia is trying to position itself as a major O&G player as part of its plan to have its PN17 status removed. The plan could include UMW’s three jack up rigs.
With the rigs, it could venture more deeply into marginal oilfields. It has already signed an agreement with two firms. It could also utilize Coastal’s Sandakan yard for its operations since the parties have signed a MOU.
Another view is that it teamed up with both Coastal and Coral Alliance, either in a full merger or as a JV company, it could become a sizeable fabricator. Ramunia is also said to be looking at yards in Indonesia .
Ramunia’s Fabricators Sdn Bhd is one of the few major fabricators in Malaysia that has been licensed by Petronas. The company has expressed that it would like to position itself as an integrated EPIC contractor.
Wednesday, October 19, 2011
Muhibbah
Muhibbah will benefit from the ramp-up in construction of projects such as the Klang Valley ’s Mass Rapid Transit system, as well as a slew of property developments on privatised state-owned land, such as the 3,300 acre Rubber Research Institute (RRI) land in Sungai Buloh. The focus on the oil and gas (O&G) sector will serve it well as the government allocates more spending under the Economic Transformation Programme (ETP), and with national oil giant Petroliam Nasional Bhd (Petronas) planning to spend RM250 billion in capital expenditure over the next five years. Meanwhile, a likely resolution of longstanding issues surrounding the APH project in Johor, for which Muhibbah has been owed some RM340 million since mid-2009 for works completed but not paid for, could also lift sentiment on the stock. The sums owed are listed as receivables and have not been written down.
Tuesday, October 18, 2011
MMHE/Sime Darby
MMHE is believed to be looking at taking over either some or all of the assets of Sime Darby Bhd’s oil and gas unit, which is parked under the latter’s troubled energy and utilities divisions.
It is said that MMHE, the heavy engineering arm of Petronas started looking at the assets several months ago. However, it is believed that the plan is still in the preliminary stage has not gone to the board yet.
MMHE has been asked by its parent, Petronas to increase its asset base, as more O&G jobs are being rolled out.
Among the O&G assets that Sime Darby owns are two fabrication yards – one in Pasir Gudang and the other in Teluk Ramunia, Johor.
MMHE is not the only interested party, as there are at least two other O&G players eyeing Sime Darby’s O&G assets.
However, MMHE declined having entered any discussions with Sime Darby for the purchase of any O&G assets. Nevertheless, as an organization, it needs to constantly evaluate additional revenues for growth. This can be achieved through an organic approach. Identification of potential assets is only one of the many steps involved, but it may or may not eventually result in an actual acquisition.
MMHE could become Malaysia ’s largest fabricator should it succeed in acquiring Sime Darby’s O&G assets such as the fabrication yards.
Despite the losses, Sime Darby’s president and group CEO had indicated that it would not hive off the O&G assets, as opportunities still abound for the division. A source says there are differing views among Sime management on whether the group should dispose of its O&G assets.
Meanwhile, both of Sime Darby’s motor and plantation division are doing well.
Industry observers say MMHE, a wholly owned unit of MISC Bhd, should have no problem in obtaining financing for Sime Darby’s O&G assets, as the former is sitting on a big cash pile.
As at Dec 3010, its cash and cash equivalents stood at rm1.79 billion. The company also has virtually no borrowings. Some of the cash is from proceeds raised in its IPO a year earlier.
As at Dec 3010, MMHE had an order book of rm3.6 billion, the bulk of which is for its engineering and construction activities.
Expecting MMHE to clinch between rm4 billion and rm5 billion in new jobs over the next 12 months (April 2011 & Beyond). Furthermore, MMHE will also see new overseas orders.
It is said that MMHE, the heavy engineering arm of Petronas started looking at the assets several months ago. However, it is believed that the plan is still in the preliminary stage has not gone to the board yet.
MMHE has been asked by its parent, Petronas to increase its asset base, as more O&G jobs are being rolled out.
Among the O&G assets that Sime Darby owns are two fabrication yards – one in Pasir Gudang and the other in Teluk Ramunia, Johor.
MMHE is not the only interested party, as there are at least two other O&G players eyeing Sime Darby’s O&G assets.
However, MMHE declined having entered any discussions with Sime Darby for the purchase of any O&G assets. Nevertheless, as an organization, it needs to constantly evaluate additional revenues for growth. This can be achieved through an organic approach. Identification of potential assets is only one of the many steps involved, but it may or may not eventually result in an actual acquisition.
MMHE could become Malaysia ’s largest fabricator should it succeed in acquiring Sime Darby’s O&G assets such as the fabrication yards.
Despite the losses, Sime Darby’s president and group CEO had indicated that it would not hive off the O&G assets, as opportunities still abound for the division. A source says there are differing views among Sime management on whether the group should dispose of its O&G assets.
Meanwhile, both of Sime Darby’s motor and plantation division are doing well.
Industry observers say MMHE, a wholly owned unit of MISC Bhd, should have no problem in obtaining financing for Sime Darby’s O&G assets, as the former is sitting on a big cash pile.
As at Dec 3010, its cash and cash equivalents stood at rm1.79 billion. The company also has virtually no borrowings. Some of the cash is from proceeds raised in its IPO a year earlier.
As at Dec 3010, MMHE had an order book of rm3.6 billion, the bulk of which is for its engineering and construction activities.
Expecting MMHE to clinch between rm4 billion and rm5 billion in new jobs over the next 12 months (April 2011 & Beyond). Furthermore, MMHE will also see new overseas orders.
Monday, October 17, 2011
BHIC
BHIC hopes to conclude its contract to construct littoral combatant ships (LCS) for the Ministry of Defence soon to achieve its target of doubling its order book in 2011.It expects the details of the contract to be ironed out by the middle of 2011.The contract would be in the billions of ringgit and would be valued much higher than the first batch of vessels. BHIC is looking forward to participate in oil and gas projects given Petroliam Nasional Bhd’s (Petronas) substantial capital expenditure programme and plans to develop marginal oilfields. BHIC is among seven companies that have a fabrication licence by Petronas.
Sunday, October 16, 2011
IJM Corp
Its order book stood at RM4.1 billion currently, of which 80.5% was from domestic projects. Management appears to be upbeat on its order book prospects. Assuming IJM Corp bags half of the RM4 billion West Coast Expressway, the jobs from the two expressways would total RM2.7billion to RM2.9 billion, which will boost its order book by 65% to 70%. Apart from highway jobs, IJM Corp had also tendered for Package B of the light rail transit (LRT) extension (RM2 billion) and would be bidding for the elevated portion of the Sungai Buloh-Kajang mass rail transit. Also there will be more private sector jobs for the group when the redevelopment of the Rubber Research Institute land and Sungai Besi Airport kicked off.
Saturday, October 15, 2011
IOI
Industry observers say IOI Corp Bhd's brush with the Roundtable on Sustainable Palm Oil (RSPO) is not expected to affect the group's operations for now as it will merely delay the certification of new estates and do not expect the suspension to affect the group's operations. Given the group's willingness to work with RSPO, this issue will be resolved amicably in due course.The issue was expected to be resolved amicably in “due course” given the group's willingness to co-operate. IOI has so far obtained RSPO certification for seven out of its 12 palm oil mills in Malaysia and has set a target of having all of its 78 local estates audited by year-end (2011). In the event that the current issue was not resolved quickly, it could eventually affect IOI Corp's sales to key markets like Europe .
Friday, October 14, 2011
POS
Should the government relax the restrictions on the use of land that the Federal Land Commission (FLC) has given to Pos Malaysia, the redevelopment of some of the land could probably earn the group hefty gains. However, all this is dependent on the (amendment of) the Postal Land Act. Thus far, there have been no updates on the proposed amendment to the Act which would allow additional non-post-related services to be carried out on the land. If the amendments are revised favourably in terms of land use, Pos Malaysia’s valuation would increase.
Thursday, October 13, 2011
Faber
Following the announcement of the non-renewal of two of Faber’s UAE contracts, the price plunged by 23% and has since maintained at this level. It is believed that all the negative news from the non-renewal of UAE contracts has been priced in. As such, Faber will now refocus on managing its 12 hospitals and clinics in the UAE while at the same time expanding to military hospitals there. Faber’s 15-year concession to provide hospital support services in government hospitals is expiring in October 2011 and the company is currently awaiting approvals from the Ministry of Health and the Economic Planning Unit. The risk of losing the government concession is relatively small.
Wednesday, October 12, 2011
YTL Power
YTLP, which has a 21-year PPA with TNB until 2015, has a positive potential extension for its first generation PPA as a power plant in operation is better than an idle one. However concerns are over its lower internal rate of return from the power purchase agreement (PPA) extension. The power purchase agreements (PPAs) for the first generation power plants, including YTL Power’s plants, will start to expire beginning 2016. If talks to renew the first generation PPAs’ fail, the government would have to plant up 10, 000 MW of power in the next two to three years. In partnership with Enefit, YTL Power estimates that it can produce power via oil shale 30% cheaper than electricity generated via imported oil and gas feedstock.
Tuesday, October 11, 2011
DBE/QSR/QL
There are already plans for OSK Investment Bank to sell the stake to another poultry related firms as DBE does not add synergistic value to the investment bank.
Potential buyers are said to be include companies such as QSR Brands and QL.
Its rm12 million from the rights issue will be used to repay its debts. This will decrease its gearing to 0.8 times.
DBE has a full poultry integration system, with breeder farms, hatcheries, broilers and processing plants. About 30% of its chickens are supplied to Tesco, 5% to KFC outlets and the rest to restaurants and hotels in Perak. However DBE has been making losses since FY2006.
However market talk that QSR & QL had turned down the offer
OSK Holdings Bhd’s wholly owned subsidiary OSK Investment Bank Bhd (OSKIB) has emerged as the single largest shareholder of poultry outfit DBE Gurney Resources Bhd, with 180.99 million shares or 26.88% of DBE’s enlarged issued share capital.
Its holding surpassed DBE executive chairman Datuk Ding Chong Chow whose interests via vehicle Fortune Junction Sdn Bhd amount to 25.52%.
OSKIB had ended up with the DBE shares as it had undertaken all unsubscribed shares in DBE pursuant to a renounceable rights issue exercise. The rights issue, which involved 400 million new shares of 10 sen each in DBE, with 200 million free detachable warrants, had only received 52% acceptances from DBE shareholders at the close of acceptance on March 17 2011.
As the underwriter for the rights issue, OSKIB had taken up the rest of the unsubscribed rights shares and is now sitting on some RM10.9 million paper profits. It is estimated that OSKIB’s subscription cost for the 180.99 million DBE shares was RM18.1 million, based on the issue price of 10 sen per rights share.
Apart from the said number of shares, OSKIB had also received 90.5 million free DBE warrants from the rights issue.
It is worth wondering what could be in store for Perak-based DBE, which had been loss-making over the past four financial years.
As at FY10 ended Dec 31, DBE had racked up accumulated losses of RM40.91 million. Meanwhile, total borrowings amounted to RM72.6 million as at Dec 31 versus RM116,000 cash.
Nevertheless, the company had managed to narrow its losses, from RM9.79 million in FY08 and RM18.73 million in FY08, to RM2.9 million and RM202,000 in FY09 and FY10 respectively. Operationally, there was also a significant improvement in its operating profit before working capital changes, which rose to RM13.09 million in FY10 from RM9.52 million in FY09.
The completion of the rights issue may put DBE on a stronger financial footing. Of the RM40 million proceeds , the company plans to set aside RM25.9 million as working capital while RM12 million will be earmarked to repay its bank loans.
DBE had also said it planned to boost the utilisation rate of its existing plant to improve on its profitability.
Potential buyers are said to be include companies such as QSR Brands and QL.
Its rm12 million from the rights issue will be used to repay its debts. This will decrease its gearing to 0.8 times.
DBE has a full poultry integration system, with breeder farms, hatcheries, broilers and processing plants. About 30% of its chickens are supplied to Tesco, 5% to KFC outlets and the rest to restaurants and hotels in Perak. However DBE has been making losses since FY2006.
However market talk that QSR & QL had turned down the offer
OSK Holdings Bhd’s wholly owned subsidiary OSK Investment Bank Bhd (OSKIB) has emerged as the single largest shareholder of poultry outfit DBE Gurney Resources Bhd, with 180.99 million shares or 26.88% of DBE’s enlarged issued share capital.
Its holding surpassed DBE executive chairman Datuk Ding Chong Chow whose interests via vehicle Fortune Junction Sdn Bhd amount to 25.52%.
OSKIB had ended up with the DBE shares as it had undertaken all unsubscribed shares in DBE pursuant to a renounceable rights issue exercise. The rights issue, which involved 400 million new shares of 10 sen each in DBE, with 200 million free detachable warrants, had only received 52% acceptances from DBE shareholders at the close of acceptance on March 17 2011.
As the underwriter for the rights issue, OSKIB had taken up the rest of the unsubscribed rights shares and is now sitting on some RM10.9 million paper profits. It is estimated that OSKIB’s subscription cost for the 180.99 million DBE shares was RM18.1 million, based on the issue price of 10 sen per rights share.
Apart from the said number of shares, OSKIB had also received 90.5 million free DBE warrants from the rights issue.
It is worth wondering what could be in store for Perak-based DBE, which had been loss-making over the past four financial years.
As at FY10 ended Dec 31, DBE had racked up accumulated losses of RM40.91 million. Meanwhile, total borrowings amounted to RM72.6 million as at Dec 31 versus RM116,000 cash.
Nevertheless, the company had managed to narrow its losses, from RM9.79 million in FY08 and RM18.73 million in FY08, to RM2.9 million and RM202,000 in FY09 and FY10 respectively. Operationally, there was also a significant improvement in its operating profit before working capital changes, which rose to RM13.09 million in FY10 from RM9.52 million in FY09.
The completion of the rights issue may put DBE on a stronger financial footing. Of the RM40 million proceeds , the company plans to set aside RM25.9 million as working capital while RM12 million will be earmarked to repay its bank loans.
DBE had also said it planned to boost the utilisation rate of its existing plant to improve on its profitability.
Monday, October 10, 2011
FCW/GBH… dated April 2011
Both which have Tan Sri Robert Tan as a common and substantial shareholder, have a total of 30.59 acres of land in Segambut, located strategically next to Mon’t Kiara.
Any potential development of the land is likely to spark interest in the two companies as they do not have strong core businesses to generate attractive profile.
GBH is looking the feasibility of developing the land. The company will make the necessary announcements when such plans materialize. As for FCW, it has been a long term plan of the board to earmark the property for redevelopment, but it has yet to embark on any development plan.
FCW bough its 15.73 acres tract in 2007 from GBH at rm86 million cash and subsequently leased back to the latter for its warehousing needs. The land was valued at rm88.26 million as at Aug 2 2010. This translates to about rm129 psf. Meanwhile, GBH’s parcel of 14.86 acres was valued at rm119 million or rm194 psf. The value of the land booked by the two companies is relatively lower than the transacted prices in that area.
As FCW and GBH’s market cap was rm128.7 million and rm329 million respectively based on 07 April 2011 closing price. If the land were developed over 10 years at a 15% profit margin, the two companies could book a total profit of rm41.25 million annually.
The Segambut land’s potential is not reflected in the market cap of both companies, although both FCW and GBH are trading at a premium to their book values. FCW and GBH net assets per share stood at 64.98 sen and rm1.02 as at 31, Dec 2010 respectively. That is because the market value of their land is not reflected in their books.
FCW’s profit for six months ended Dec 31, 2010 with 60.44% from the lease of its Segambut land and warehouses to GBH. Its telecommunications division and contract manufacturing business brought in only rm1.79 million.
Besides the sustainability of the income stream from GBH is uncertain as the clay pipes and sanitary ware marker is still in the red. Nevertheless, competition in the ceramic building materials industry remains intense with imports from China . So unless GBH returns to the black with a sound core business, its ability to pay FCW rent totaling rm5.3 million a year remains uncertain.
But what is certain is that both companies have plans to develop the 30.59 acres of land. And considering its proximity to Mon;t Kiara and Sentul East along Jln Ipoh, the potential development could lead to a possible re rating of both companies when a development plan is finally unveiled.
Any potential development of the land is likely to spark interest in the two companies as they do not have strong core businesses to generate attractive profile.
GBH is looking the feasibility of developing the land. The company will make the necessary announcements when such plans materialize. As for FCW, it has been a long term plan of the board to earmark the property for redevelopment, but it has yet to embark on any development plan.
FCW bough its 15.73 acres tract in 2007 from GBH at rm86 million cash and subsequently leased back to the latter for its warehousing needs. The land was valued at rm88.26 million as at Aug 2 2010. This translates to about rm129 psf. Meanwhile, GBH’s parcel of 14.86 acres was valued at rm119 million or rm194 psf. The value of the land booked by the two companies is relatively lower than the transacted prices in that area.
As FCW and GBH’s market cap was rm128.7 million and rm329 million respectively based on 07 April 2011 closing price. If the land were developed over 10 years at a 15% profit margin, the two companies could book a total profit of rm41.25 million annually.
The Segambut land’s potential is not reflected in the market cap of both companies, although both FCW and GBH are trading at a premium to their book values. FCW and GBH net assets per share stood at 64.98 sen and rm1.02 as at 31, Dec 2010 respectively. That is because the market value of their land is not reflected in their books.
FCW’s profit for six months ended Dec 31, 2010 with 60.44% from the lease of its Segambut land and warehouses to GBH. Its telecommunications division and contract manufacturing business brought in only rm1.79 million.
Besides the sustainability of the income stream from GBH is uncertain as the clay pipes and sanitary ware marker is still in the red. Nevertheless, competition in the ceramic building materials industry remains intense with imports from China . So unless GBH returns to the black with a sound core business, its ability to pay FCW rent totaling rm5.3 million a year remains uncertain.
But what is certain is that both companies have plans to develop the 30.59 acres of land. And considering its proximity to Mon;t Kiara and Sentul East along Jln Ipoh, the potential development could lead to a possible re rating of both companies when a development plan is finally unveiled.
Sunday, October 9, 2011
Shell/KUB/BStead/KKB/Ramunia … dated April 2011
Sources say Royal Dutch Shell plc has shortlisted five potential bidders for its downstream LPG business in Peninsular Malaysia.
It is learnt that the shortlisted companies are BStead, KUB, LTAT (Ramunia/Alam Maritim) KKB and IPS.
The disposal is similar to Shell divesting its LPG business in other parts of Asia in concentrating on the upstream business.
BH Petroleum, a wholly owned subsidiary of BStead Holdings, is said to be the favorite in the shortlist, based on its reach and brand presence. BStead is said to be trying to grow its petroleum related businesses, including LPG. Contributions from the petroleum business has yet to play a significant role in the group earnings,
The other strong contender is said to be Sarawak based KKB Engineering. If KKB wins the bid, it would have a significant presence in the LPG business where Shell is one of the top two LPG distributors in Malaysia .
KUB has an LPG distribution business that is based mainly in East Malaysia . However, the distribution is small and not a significant contributor to the company’s overall business.
As for LTAT, it has some interests in the O&G business via Ramunia Bhd and a JV with Alam Maritim Bhd. However, these listed companies are involved in the upstream O&G industry. Also, Ramunia does not have a core business and it would beneficial for LTAT if it were to purchase the Shell LPG business.
The dark horse is IPS as the former Shell chairman Datuk Saw is one of its directors.
It is learnt that the shortlisted companies are BStead, KUB, LTAT (Ramunia/Alam Maritim) KKB and IPS.
The disposal is similar to Shell divesting its LPG business in other parts of Asia in concentrating on the upstream business.
BH Petroleum, a wholly owned subsidiary of BStead Holdings, is said to be the favorite in the shortlist, based on its reach and brand presence. BStead is said to be trying to grow its petroleum related businesses, including LPG. Contributions from the petroleum business has yet to play a significant role in the group earnings,
The other strong contender is said to be Sarawak based KKB Engineering. If KKB wins the bid, it would have a significant presence in the LPG business where Shell is one of the top two LPG distributors in Malaysia .
KUB has an LPG distribution business that is based mainly in East Malaysia . However, the distribution is small and not a significant contributor to the company’s overall business.
As for LTAT, it has some interests in the O&G business via Ramunia Bhd and a JV with Alam Maritim Bhd. However, these listed companies are involved in the upstream O&G industry. Also, Ramunia does not have a core business and it would beneficial for LTAT if it were to purchase the Shell LPG business.
The dark horse is IPS as the former Shell chairman Datuk Saw is one of its directors.
Saturday, October 1, 2011
MPHB/MWE..
Investors will now be watching if diversified MPHB acts according to expectations or springs another surprise.
The moves to transform into a pure gaming company may soon result in the divestment of MPHB’s non core assets such as its stockbroking, general insurance and hospitality businesses.
The company plans to raise up to rm1 billion from the disposal of non core assets. The best tack for the company is now to wait for the right time to seek the highest possible for its non core assets.
MPHB has not won over many investors because its non core businesses have had little earnings visibility. But should it embark on a divestment programme, investors would have more confidence in the company and this will lead to a re rating of the stock. This will unlock cash from the businesses, leaving MPHB an NFO counter.
It is worth noting that MPHB Surin also owns a 32.48% indirect state in another listed entity. MWE Holdings Bhd, which is also fairly diversified in nature. MWE has businesses covering garments, electronics, a golf and country club, plantation and properties. Surin’s non independent non executive director and had served as MD of its spinning mills division in 1974.
Three other MWE directors also have served at MPHB or its subsidiaries, namely MWE executive director Lim Kong Yew, independent non executive director Lawrence Lam who is currently Magnum Corp Sdn Bhd’s CEO and Datuk Yogesvaran who also sits on the board of Muli-Purpose Insurans.
Multi Purpose Insurans is one of MWE’s 30 top largest shareholders, with a 3.45% stake equity stake while MPHB itself owns a 1.29% stake.
Industry observers says that MWE may be a convenient place to house MPHB’s property division, as there are no immediately apparent synergies between MPHB’s stockbroking and insurance businesses with MWE’s own divisions.
The moves to transform into a pure gaming company may soon result in the divestment of MPHB’s non core assets such as its stockbroking, general insurance and hospitality businesses.
The company plans to raise up to rm1 billion from the disposal of non core assets. The best tack for the company is now to wait for the right time to seek the highest possible for its non core assets.
MPHB has not won over many investors because its non core businesses have had little earnings visibility. But should it embark on a divestment programme, investors would have more confidence in the company and this will lead to a re rating of the stock. This will unlock cash from the businesses, leaving MPHB an NFO counter.
It is worth noting that MPHB Surin also owns a 32.48% indirect state in another listed entity. MWE Holdings Bhd, which is also fairly diversified in nature. MWE has businesses covering garments, electronics, a golf and country club, plantation and properties. Surin’s non independent non executive director and had served as MD of its spinning mills division in 1974.
Three other MWE directors also have served at MPHB or its subsidiaries, namely MWE executive director Lim Kong Yew, independent non executive director Lawrence Lam who is currently Magnum Corp Sdn Bhd’s CEO and Datuk Yogesvaran who also sits on the board of Muli-Purpose Insurans.
Multi Purpose Insurans is one of MWE’s 30 top largest shareholders, with a 3.45% stake equity stake while MPHB itself owns a 1.29% stake.
Industry observers says that MWE may be a convenient place to house MPHB’s property division, as there are no immediately apparent synergies between MPHB’s stockbroking and insurance businesses with MWE’s own divisions.
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