News Highlights - Media Chinese International, AIrAsia, Tan Chong Motor Holdings

Media Chinese International Ltd (RM1.35/share)

Proposes 41 sen special dividend

Media Chinese International Ltd (MCIL) has proposed to reward shareholders with a special dividend of US$219.8mil (HK$1.70bil) or 13 US cents (41 sen or HK$1.01) a share. MCIL said on Monday to facilitate the proposed dividend, MCIL had proposed a capital reduction of US$219.8mil (RM700mil).

It said the proposed dividend would be part financed by internal funds of US$62.8mil (RM200mil) and part financed by new bank borrowings of about US$157.0mil (RM500mil).

MCIL group CEO Francis Tiong said the corporate proposals were in line with the group’s initiative to actively manage its capital effectively and efficiently and reward its shareholders. – StarBiz

AirAsia Bhd (RM3.79/share)

AirAsia X defends viability of its business model

Virgin Group’s divestment of its 10% stake in AirAsia X is the result of portfolio realignment, said an executive with Virgin Group. Virgin Group’s decision to sell its equity interest in AirAsia X two weeks ago has raised doubts over the viability of the long-haul, low-cost carrier (LCC) business model. In defending the viability of its business model, AirAsia X CEO Azran Osman-Rani said the sale was not motivated by any issues with the long-haul LCC model. He added that the sale price provided Virgin with a profit several times the multiple of their purchase price, providing them an attractive investment return. The concerns over the long-haul budget carrier model are not unfounded, especially since the 2008/09 global financial crisis clipped the wings of many LCCs. However, Azran said such concern is not valid at AirAsia X. The upcoming IPO of AirAsia X will be the ultimate litmus test for investor confidence in the airline and more significantly, the long-haul LCC model. – The Edge

Tan Chong Motor Holdings Bhd (RM4.60/share)

Optimistic of recovery in market share

Edaran Tan Chong Motor Sdn Bhd (ETCM), a wholly-owned unit of Tan Chong Motors Holdings Bhd, is optimistic the market share for Nissan cars will recover to 5.6% from 5.3% in the first five months of the year. Its executive director Datuk Dr Ang Bon Beng said ETCM was on track to outpace the 2012 total industry volume’s (TIV) estimated growth of 2.5% for Nissan sales. Ang, who was optimistic to see better earnings in second half of this year as the company has recovered from supply chain constraints, said multi-purpose vehicle, Nissan Grand Livina, which accounted for almost 40% of its market share, would continue to take the front seat for ETCM’s sales this year. He said this, coupled with new models to be launched in the second half, will contribute to the expected surge in the company’s sales volume after Tan Chong’s lacklustre performance in the first quarter of the year. - StarBiz

Source: AmeSecurities