Patimas: The latest changes in Patimas is still lack of clarity on the rejuvenation and new direction of the PN17 company. Although Syawaras and CP are widely seen as white knights for Patimas, they have however not specified the type of business they plan to inject into Patimas and the firm’s earnings outlook.
They have not given any earnings projection and details on the type of business.
Meanwhile, it was reported that Patimas was a takeover target of Hong Kong 's Tencent Holdings Ltd. The Shenzhen-based company operates in four segments, namely Internet value-added services, mobile and telecommunications value-added services and online advertising.
However, Patimas said in 05 Feb 2013 that it was still in the midst of formulating a regularisation plan to address its PN17 status. It said it was required to submit a regularisation plan to the authorities by October 30, 2013, or in nine months.
Pasukhas: It is believed to have emerged as the frontrunner to secure a RM300 million water contract in Indonesia . The contract is to supply clean water and flood channel management for a period of eight years. The contract amount will be staggered during the eight years.
The first phase of the contract is worth about RM80 million, and will start in the first quarter of 2013. This will help boost Pasukhas' revenue significantly in the current financial year.
Pasukhas' order book currently stands at RM67.9 million and will last for one and a half years from Feb 2013 while it has also placed tenders amounting to RM100 million.
Indonesia is not a new market for the company as currently some 5.9 per cent of its revenue comes from Southeast Asia 's most populated country. In Indonesia , Pasukhas mainly sells low voltage switchboards as well as converter transformers.
Up to the third quarter ended September 2012, Pasukhas posted a revenue of RM22.6 million, while its pre-tax profit was at RM2.48 million.
DRBHicom: It is unlikely to go private even with the perceived sensitive nature of some of its businesses such as Defense technologies Sdn Bhd where there is little disclosure. Moreover the privatization rumor is not new and would have already occurred at lower levels.
However it may spin off its motor business given that the ongoing capex for Proton, Lotus and the expansion of VW capacity by 50000 units by 2016/2017,
Market observers are optimistic DRBHicom will turn around Proton given its recent developments … rationalizing the distribution business, tiering auto parts suppliers and purchasing engine from Petronas and collaboration with Honda.
Expect Bank Mualumat Malaysia Bhd and POS Malaysia to be the anchors of its services division. The expansion of POS’ courier business, transformation into a one stop retail shop will drive up profitability.
Alam Flora Sdn Bhd, Puspakom Sdn Bhd and KL Airport Service Sdn Bhd have vast potential with the expansion to two new states, potential mandatory inspection of private vehicles, and opening of KLIA2 respectively.
MBSB: Its allowance for its impairment losses on loans at the end of fourth quarter of the financial year ended Dec 31, 2012 was 80% lower quarter on quarter and 76% year on year due to the effect of a one off writeback of about rm40 million to rm45 million. The group had earlier overpriced for its legacy mortgage loans.
In its FY2012 results announcement, MBSB proposed a special dividend of 18% less 25% tax, The special dividend is franked by the group’s unutilised tax credit balance which will expire on Dec 31 2013. Expect MBSB to dish out more special payouts in 2013 in order to utilize its remaining Section 108 balances. However, there could be a risk of dilution due to the conversion of warrants by the major shareholders.
Net loans grew in FY2012 by 60% year on year to rm24.2 billion led by increase in PF loans, followed by mortgage, corporate and auto financing.
Expecting its net interest margin to compress due to intensifying compeition.
MBSB’s balance sheet expansion story remains intact, but the group needs a new capital management plan to address its relatively low core capital ratio of 6.3% as at end Dec 2012. Management had indicated a possible capital raising exercise of circa rm3 billion to rm4 billion (to be done in stages), which may involve a rights issue and a dividend reinvestment plan. The group’s shareholders’ fund is expected to increase by rm500 million to rm2 billion under such an exercise in order to meet the BASEL III minimum capital requirement. Further details on the proposed exercise are scheduled to be revealed at the end of March 2013 or early April 2013.
UMW Holdings Bhd: has received a letter of award from Sabah Shell Petroleum Company Ltd for a US$140mil contract. Its unit UMW Petrodril (Malaysia) Sdn Bhd received the letter for the contract to supply a single combo top tension riser for Sabah Shell's Malikai project. The contract is expected to contribute positively to the 2013 earnings and net assets of the UMW Group.
The contract is expected to contribute positively to 2013 earnings and net assets of the UMW Group.
The latest contract is evidence UMW Holdings is riding the current (Feb 2013) O&G boom and are expecting more to come.
Potential near term news flow includes the award of contract for the group’s fourth offshore rig, Miaga 4, and the privatization of its US listed associate WSP Holdings Ltd in the first half of 2013.
However some market observers opined that while its prospects are good but most of the positives have been priced in (Feb 2013).
Robust car sales were also the key driver of UMW Holdings’ share price, apart from the improving performance in the O&G division.
UMW commands the lion’s share (47%) of the local automotive market and 38% owned ossociate Perodua in 2012.
However its high foreign shareholding has led to some concern over UMW Holdings’ foreign shareholding stood at 25.8% stake compared with 12% in Jan 2011. Its high foreign shareholding leaves it vulnerable in a consolidating market ahead of the general election.
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