Saturday, October 31, 2009
New LCCT site clearing works to start next month
Friday, October 30, 2009
US economy returns to growth in 3Q after deep slump
Scomi (RM0.565) may sell assets to raise RM350m
Sunrise (RM2.12) plans projects worth RM1.5b in KL
Thursday, October 29, 2009
Alam Maritim (RM1.89) subsidiary bags two jobs worth RM36.98m
SP Setia (RM3.81) to develop RM2bil mixed development in China
Wednesday, October 28, 2009
WCT (RM2.68), Iskandar to develop RM600m condos
WCT Bhd and Iskandar Investment Bhd will jointly develop and co-own the 4.4-hectare 1Medini residential project inMedini Iskandar, Johor with a gross development value (GDV) of RM600 million. The project will be developed by One Medini Sdn Bhd, a 70:30 per cent joint venture between WCT's subsidiary, WCT Land Sdn Bhd and Medini Land Sdn Bhd, a subsidiary of Iskandar Investment.
WCT chairman Datuk Captain Ahmad Sufian attributed the involvement of the company in the 1Medini project as a bonus because WCT had already awarded RM766 million worth of infrastructure works in Medini Iskandar in July this year, where works are expected to be completed by July 2011.
"We are proud indeed to be given this golden opportunity to make our first foray into the Iskandar Malaysia via the Medini Iskandar project and hope to expand our investment here," he told reporters after the signing of shareholder agreement for the development of 1Medini residence between WCT Land and MediniLand, in Putrajaya today. Ahmad said the WCT also wanted to further grow its business in Malaysia and would continue to bid for any projects locally as well as international.
Its order book currently stands at RM3.5 billion. In 2008, local operations contributed 40 per cent to the group's revenue while the balance of 60 per cent came from the overseas market. The construction and property development company currently has presence in United Arab Emirates, Qatar, Bahrain, Oman, India and Vietnam. Scheduled to be fully completed by 2015, the 1,332 units of condominiums in1Medini would include a 68,800 square feet commercial area for local retail businesses.
Priced at RM350 per square feet, the first phase of the condominium is expected to be launched in early 2012. Iskandar Investment president and chief executive officer, Arlida Ariff, meanwhile, said the strategic partnership with WCT in 1Medini project would help to meet the increasing demand for quality homes as well as to attract talented global citizens to live, work and play in Iskandar Malaysia.
There has been interest from both Indonesians and Singaporeans, she said. According to the Iskandar Regional Development Authority (IRDA), Iskandar Malaysia has over RM47 billion in committed funds from the government bodies and international investors to date.
Source: www.btimes.com.my
Commentary: WCT's 70% stake in the RM600mil project would amount to RM420mil, not a significant amount to its overall property development compared to its Paradigm project in Kelana Jaya (RM1.4bil, currently under construction), Platinum in Vietnam (RM2bil - construction schedule unknown, not so soon) and existing residential projects (outstanding GDV of RM2.1bil). The project will be launched in mid-2010 while construction will start in mid-2010 and expected to complete by 2015.
By simple calculation, assuming 8-year horizon over its sales, 20% net margins, probably can add RM10mil net profit to its earnings per year starting mid-2010. Situated close to Legoland in Medini North, Newcastle University Medical Malaysia, Kota Iskandar and Iskandar Financial District, the properties most likely will enjoy good take up rates. There are many who take a cautious stance over the likelihood of success of Iskandar Corridor (including me) in view of Malaysia's poor records of launching corridors successfully (Proton City, Putrajaya/Cyberjaya, MSC etc).
Nonetheless, so far property developers like SP Setia, Berinda (A unit of Kuok Group) indicated that they're enjoying good take up rates from Iskandar projects with buyers coming from China, Singapore & Malaysia (Ok, give the benefit of doubt on Iskandar's success). This is WCT's first foray into Iskandar's property development and most probably won't be the last. Earlier, WCT was awarded RM766mil worth of infrastructure works.
WCT's current orderbook is at RM2.8bil (Excluding Paradigm Project works of RM733mil as it's inter-segment sales) which will last the company 2 years. WCT is currently eyeing for a few jobs in Middle East (Total project bids of about RM3.2bil), Vietnam and Malaysia (LCCT - RM2bil, Sabah water infrastructure works - >RM1bil, hospital jobs - RM200mil). Thus far, WCT orderbook replenishment has been impressive at RM1.4bil YTD, exceeding its forecast of RM1bil which further indicates WCT's strong ability to secure projects.
At a discount to its peers: Assuming orderbook replenishment of RM1.9bil and RM2bil for FY2009 and FY2010, its revenue and net profit for FY2010 should be in the range of RM2.4bil and RM170mil respectively. EPS for 2010 would be at 22.1 sen. PER 2010 is at 12x, which is a huge discount compared to Gamuda & IJM (about 20x). By attaching PER of 15x, share price should move to RM3.30. Price triggers including news of job wins and recognition of its additional works worth RM740mil for NDIA (New Doha International Airport) which will restore its margins (Earlier NDIA was a low margin job owing to unrecognized additional works).
Disclaimer: The above article does not represent an investment advisory service as no subscription or management fees are charged. The contents of the article are provided as general information only and should not be taken as investment advice or as a recommendation to buy or sell any security or financial instrument. Any investment decisions carried out based on information, analysis, or commentary provided above is solely your responsibility. You should consult your investment adviser before making any investment decisions.
Suncity to take part in RM2.5 billion China project
Tuesday, October 27, 2009
Steel (Lion Industries, Kinsteel, Southern Steel, Ann Joo Resources, Masteel): Neutral => Mid-long term buy







Masteel (RM1.04) clinches RM120 mil deal with Stemcor
Source: www.btimes.com.my
MALAYSIA Steel Works (KL) Bhd (Masteel) has clinched a deal to export RM120 million worth of steel bars to Australia over the next two years under an agreement with Stemcor Australia Pty Ltd. Its managing director and chief executive officer, Datuk Seri Tai Hean Leng, said the deal signified the company's commitment to export substantial amount of steel bars to the Australian market.
"Australia and New Zealand will be our main markets in the next four to five years," he told reporters after signing the off-take agreement with Stemcor here today. Also present was Deputy Trade Minister of International Trade and Industry Datuk Jacob Dungau Sagan. Stemcor is an independent international steel trading organisation.
Tai said the agreement would allow Masteel to penetrate growth markets like Australia and New Zealand and at the same time, bring about export income for the country. "Cementing our presence in the Australian market would further augment our expertise as an exporter of steel billets to the Asia Pacific markets.
"This is part of our long-term strategy to focus on export markets for growth and we have worked hard to establish this for the last five years," he said. Adding another feather to its cap, Masteel was awarded the Certification of Product Compliance from the Australian Certification Authority for Reinforcing Steels (ACRS) for the steel manufacturer's continued effort to raise the bar and ensure the safe and consistent quality of its products.
ACRS is an independent third-party accreditation system with the goal to ensure that reinforcing steels are quality-approved materials which comply with Australian standards. Tai said the company could also import the products to New Zealand as it has accepted the ACRS standard. "Masteel has already made headway into New Zealand market and its first export deal is expected to be concluded within the next few weeks," he said.
He said currently, export market made up to 35 per cent of Masteel's production capacity, which annually produced 450,000 tonnes of billet and 350,000 tonnes steel bar. "We will continue to invest between RM15 million and RM18 million on new technology to boost efficiency and quality to reduce manufacturing cost next year," he said.
Tai said despite global economic meltdown, the company expected demand for steel to recover from the fourth quarter this year on the government's pump-priming initiatives to boost steel demand.
"Given this backdrop and with this new off-take agreement, Masteel is optimistic these developments will contribute to a healthier financial performance for the next two years," he said.
Scicom (RM0.43) moving to Main Market
Source: www.btimes.com.my
SCICOM (MSC) Bhd, an outsourcing firm, has proposed to move up to the main market from the ACE Market, to boost interest in its stock. It has met all the profit track record requirements for the transfer, which it expects to be done in the first quarter of 2010. Companies typically ask to move to the main market because certain big investors are prevented from buying stocks that are considered too small.
"The proposed transfer will enhance Scicom's credibility, standing and appeal among investors, especially institutional investors," Scicom said in a statement to Bursa Malaysia yesterday. Earlier, chief executive officer Leo Ariyanayakam said Scicom could sustain its growth for financial year ending June 30 2010. "We expect to increase our staff as we are now in the growth mode and plan to even expand our operations abroad," he told the media after the company's annual general meeting in Kuala Lumpur yesterday.
Scicom counts multinationals like handphone maker Nokia, budget carrier AirAsia and telecoms group Singapore Telecommunications as clients. Ariyanayakam said the company has been short listed for jobs worth millions of ringgit by several multinational corporation abroad but he did not want to elaborate. Scicom also reported its first quarter results yesterday. Its net profit for the quarter to September 30 2009 fell 29 per cent to RM2 million from a year ago, on revenue of RM31 million, which dropped 7.3 per cent.
The lower figures were mainly due to staff reduction in the US and unrealised losses on foreign exchange due to a strong ringgit. Scicom is confident of growing its earnings in fiscal 2010. "The main thrust for our business continues to be in the outsourcing sector with high value prospects in the pipeline which we expect to close within the financial year," Scicom said.
Simple observation: Good for the company. Might attract some interest on the stock. Nevertheless, stock looks expensive for an ACE stock with highish PER of mid teens. Borrowings minimal at half a million while cash is at RM4.7mil, balance sheet looks ok.
Shares issued: 265.3mil
Market Cap: RM114.1mil
Disclaimer: The above article does not represent an investment advisory service as no subscription or management fees are charged. The contents of the article are provided as general information only and should not be taken as investment advice or as a recommendation to buy or sell any security or financial instrument. Any investment decisions carried out based on information, analysis, or commentary provided above is solely your responsibility. You should consult your investment adviser before making any investment decisions.
Fajarbaru (RM1.26) 1QFY06/2010 Results: Ok ok, in line

Sunday, October 25, 2009
Budget 2010 & others: My simple take

Friday, October 23, 2009
Fajarbaru (RM1.21): Watch out for LCCT award in November

Wednesday, October 21, 2009
Mudajaya (RM3.60): Another YTL in the making? A real gem among construction stocks

