Local News: 27 December 2011

27 December 2011
Maybank: Targets the rich. Malayan Banking Bhd (Maybank) has appointed an international management consultant to conduct a study on how it could develop the wealth management business to cater to the affluent market in the region. (Source: The Star)

Parkson: Regional expansion plan. Parkson Holdings Bhd, which last month made a SGD138m initial public offering (IPO) of its Southeast Asian unit in Singapore, is looking to expand its footprint into the Philippines, Thailand and Myanmar through acquisitions or greenfield projects as part of its plans to become one of the region's largest department store chains. (Source: The Sun)

Transportation: RM950m for new trains. The government has budgeted nearly RM1b on new trains for the Ampang light rail transit (LRT) line extension project and KTM Bhd. It is learnt that tenders for the supply of 20 sets of six-car electric commuter trains for the LRT project closed on December 12, attracting six bidders. Their bids range between RM550m and RM780m. The contract is expected to be awarded by April. (Source: Business Times)

Market: More Malaysian firms investing in the country. The era of local companies preferring to invest in overseas markets has come to an end, says Deputy International Trade and Industry Minister Datuk Mukhriz Mahathir. Local companies had seen a lot of excitement in the local economy due to the Economic Transformation Programme and the Entry Point Projects. Domestic direct investment (DDI) totalled RM19.7 b, or 48.4%, and foreign direct investment RM21b, or 51.6%, just slightly higher from that of October 2011. (Source: Business Times)

Renewable energy: List of RE quota. Sustainable Energy Development Authority (Seda) will soon publish renewable energy quota for feed-in approval (FiA) applications submitted this month. Under the Renewable Energy Act 2011, Tenaga Nasional Bhd is obliged to buy renewable power produced by licensed players at special rates. The rates are known as feed-in tariff, and referred to the idea of producers selling their energy to the power grid. It will list out the successful FiA applications, including details such as owner of the project, location as well as size. (Source: The Star)

(Information from MBB)

Weekly Equity Flyer: 27 December 2011 - Latexx & Supermax

27 December 2011

1. LATEXX PARTNERS BERHAD  (stock code: 7064)

Latexx 3Q net profit falls 27.8% to RM12.73m

Latexx Partners Bhd's net profit for the third quarter ended Sept 30, 2011 fell 27.8% to RM12.73 million from RM17.63 million a year earlier, due mainly to the persistently high raw material prices and the weaker US dollar. The company said that its revenue for the quarter slipped 6.2% to RM121.81 million from RM129.88 million in 2010. Earnings per share decreased to 5.17 sen compared to 8.19 sen in 2010, while net assets per share was RM1.23.

Did you know?

The company is currently on an aggressive expansion plan. The current capacity is 6 billion pieces of gloves annually. By 2013, a target of 12 billion gloves is set. And, by year 2015 to achieve a shipment target of 15 billion gloves per annum.

Rationale

Latexx is highlighted this week based on the following points: -

Currently trading at a Low P/E of 7.9x
High Return on Equity (ROE) of 32.4%
High Return on Capital (ROC) of 23.8%
High Return on Asset (ROA) of 17.9%                                    


2. SUPERMAX CORPORATION BERHAD  (stock code: 7106)
Supermax to grow sales with additional capacity

Glovemaker Supermax Corporation Berhad is looking at growing its sales with the expansion of its capacity. It also hopes to set up a distribution centre in China to expand its presence there. Executive chairman and managing director Datuk Seri Stanley Thai told a media briefing Supermax expects additional capacity for surgical gloves from its Lot 42 plant. This could bump its output to 336 million pairs of surgical gloves per year from 30 million currently. The additional sales are expected to be around US$67.2 million (RM200 million) with a 15% profit margin, which could yield a profit of some US$10.1 million, he said.

Did you know?

Supermax Group produces up to 16 billions pieces of gloves per year, meeting approximately 11% of the world demand for latex examination gloves. Supermax Group has nine (9) manufacturing plants based in Malaysia equipped with the state-of-the-art machinery, energy-saving biomass system and a research and development centre.

Rationale

Supermax is highlighted in this week's flyer based on these points: -
Currently trades at 11x PE which is lower than the industry average of 14.16x
High ROA, ROE and ROC of 15.8%, 25.4%, and 18.6% respectively                              


Happy Trading!

(Information from MBB)

Weekly Equity Flyer: 19 December 2011

19 December 2011

Two counters highlighted in this week's equities flyer:-


1. V.S. INDUSTRY BERHAD (stock code: 6963)

VS Industry invests RM30 million in Johor

Integrated electronic manufacturing services (EMS) provider V.S. Industry Bhd has invested about RM30 million to produce Keurig single-cup coffee brewer machines in Senai, Johor. The dedicated 2.4ha facility will see VS Industry producing Keurig Inc’s single-cup brewers and accessories for exports to North America. The facility’s 200,000 square feet area will also be used for its packing, logistic and storage.

Did you know?

VS Industry Berhad Malaysia has over 27 years of Multi-products OEM contract manufacturing/EMS experiences. VS is among the top 50 Contract Manufacturing services providers in the world. Its operations locate in Malaysia, Indonesia, Vietnam and China employing over 15,000 workers and operating on more than 5 millions sq. ft. of manufacturing space and still adding.

Rationale

VS is highlighted this week based on the following points: -

Low Historical P/E of 9.6x with a forward P/E of 4.0x
Currently trading at a low P/B of 0.69x
Increasing Revenue and EPS since 2009
High dividend yield of 6.08%


2.METRO KAJANG HOLDINGS BERHAD (stock code: 6114)
The Group’s revenue for the fourth quarter ended 30 September 2011 increased by 74% to RM125.2 million

The Group’s revenue for the fourth quarter ended 30 September 2011 increased by 74% to RM125.2 million compared to the preceding year corresponding quarter of RM71.8 million. The profit before tax increased by 14% to RM20.1 million compared to the preceding year corresponding quarter of RM17.7 million due to principally higher profit contribution from the associated company and higher percentage of profit recognition of on-going and new projects from the property and construction division. However, the higher profit contribution from the property and construction division was reduced by the higher administrative and other expenses incurred by the plantation division.

Did you know?

The MKH Group comprises of 48 subsidiaries and 1 associate company and are principally involved in property development, hospitality services, investment holding and furniture manufacturing. The MKH Group has completed over 20,000 units of properties and is well known as a reputable property developer, especially in Kajang. In addition, the Group also operates a hotel (Prescott Metro Inn) and 2 shopping complexes (Plaza Metro Kajang and Metro Point Complex) in Kajang town itself.

Rationale

MKH is highlighted in this week's flyer based on these points: -
Currently trading at a low P/B of 0.59x
Low P/E of 11.32x in comparison to the KLCI of 15.75x


Thank you & Happy Trading!

(Information from MBB)