Monday, September 8, 2014

Stocks To Watch - AirAsia X, Wah Seong, Titijaya Land, E&O, NTPM, parties involved in the proposed mega-bank

KUALA LUMPUR (Sept 05): Based on news flows and corporate results released on Friday (Sept 05), some of the companies that may attract investor attention on Monday (Sept 08) include the following: AirAsia X Bhd, Wah Seong Corp Bhd, Titijaya Land Bhd, Eastern and Oriental Bhd (E&O), NTPM Holdings Bhd; and the parties involved in the proposed mega-bank, such as CIMB Group Holdings Bhd, RHB Capital Bhd and Malaysia Building Society Bhd.

AirAsia X Bhd, the long-haul low-cost arm of AirAsia Bhd, said its Indonesian unit has been granted an air operator's certificate (AOC) from Indonesia’s aviation regulator, the Directorate General of Civil Aviation (DGCA).

An AOC allows an aircraft operator to use its aircraft for commercial air operations.

In a filing with Bursa Malaysia today, AirAsia X said PT Indonesia AirAsia Extra (IAAX) had received the approval from DGCA for the AOC, yesterday.

“With this AOC, IAAX will now commence application for operating permits and slots to its intended international routes.

“At present, IAAX has one Airbus A330-300 leased from Epic Leasing LLC — an intermediary between the company and IAAX. IAAX also aims to lease additional aircraft, moving forward,” said AirAsia X.

It added that the holding of AirAsia X in the share capital of IAAX, will be 49%.

Wah Seong Corp Bhd will sell electricity to a Cambodia state-owned firm, under a 10-year power purchase agreement (PPA) with the latter.

In a statement to Bursa Malaysia, Wah Seong said its subsidiary P.M.T.I Energy (Cambodia) Co Ltd (PMTIEC), had today signed the PPA with Electricité Du Cambodge (EDC). This involves the sale of 48,000MW a year to EDC’s network.

According to Wah Seong, PMTIEC had earlier secured the approval of Cambodia's Mines and Energy Ministry, to invest in the construction of a 10MW an hour rice husk power plant there.

"The venture is in line with the group’s strategy of developing a portfolio of renewable energy/power plants in the region, and is expected to contribute positively to the earnings of WSC Group, over the power supply period of ten (10) years," Wah Seong said.

AIA Bhd has purchased more shares in Titijaya Land Bhd, raising its direct stake in the latter to 5.79%.

According to property developer Titijaya's filing to Bursa, the insurance firm AIA had purchased 1.55 million Titijaya shares last Friday (Aug 29).

The transaction further increased AIA's direct stake in Titijaya to 20.44 million shares. AIA also owns an indirect 0.11% stake, comprising 390,500 shares in Titijaya.

AIA had emerged as a major shareholder in Titijaya in July this year, after acquiring a direct 5.26% stake in the latter.

Eastern & Oriental Bhd (E&O) proposed a bonus issue of 114.09 million ordinary shares of RM1 each, on the basis of one bonus share for every 10 existing shares held in the company.

E&O told Bursa Malaysia that the bonus issue will be financed by capitalising RM114.094 million from the share premium account of the company.

"The proposed bonus issue was to reward existing shareholders by enabling them to have greater participation, and to enhance the trading liquidity and marketability," it said.

“The entitlement date will be determined and announced at a later date, upon receipt of all relevant approvals for the proposed bonus issue.

“The proposed bonus issue is not intended to be implemented in stages, over a period of time,” it said.

Market leader in tissue products NTPM Holdings Bhd, saw its net profit slid 41.47% to RM7 million for the first quarter ended July 31, 2014 (1QFY15), against RM11.96 million last year.

NTPM attributed the decreased to the increase in cost of raw material, labour and utility — especially electricity and natural gas.

Its revenue however, grew marginally by 0.4% to RM132.24 million, from RM131.75 million as recorded in the 1QFY14, thanks to the higher demand for tissue products in the domestic market.

Going forward, the company expects that the business environment will remain competitive in the current financial year, due to the mounting costs pressure and keen competition.

"In light of these challenges, we have strategic plans and control measures put in place, to mitigate the impact from these adverse conditions. We are also looking into ways to strengthen our customer base and improve our distribution channel," it said.

NTPM is looking at developing new products and opportunity to venture into new business segments, if the expansion synergizes with its current business model.

Moving to the banking sector, CIMB Group Holdings Bhd, RHB Capital Bhd (RHBCap) and Malaysia Building Society Bhd (MBSB) will also be closely watched on Monday.

This is due to the Employees Provident Fund (EPF) — the major shareholder of RHBCap and also a substantial shareholder of CIMB Group — having issued a strongly-worded statement over the leak of a document that was circulated within the board of RHBCap, in which it is a major shareholder.

The Edge Financial Daily reported during the week ended Sept 05 (Friday), that the said document was endorsed by a board member of RHBCap, and detailed the objection against allowing EPF to vote in the merger between RHBCap and CIMB Group.

In a statement, the retirement fund described the actions of “certain parties” [for divulging such information to the media] as a “gross misconduct” and a “clear breach of trust and professional duty.” It has also asked for investigations to be conducted on the matter.

EPF said the move to divulge such information is a pre-emptive attempt to prevent an impartial discussion on the legitimate voting rights of a shareholder.

“We find it shocking that certain parties have unscrupulously distributed confidential correspondence and discussions at board level, to members of the media,” the statement read.

“Their actions are unacceptable under Malaysian law and market practice, and a clear breach of trust and professional duty.

“The EPF has requested that appropriate action be taken to investigate this matter, and address this gross misconduct,” the statement added.

Written by Gho Chee Yuan of

1 comment:

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