Stocks In Focus MY (Genting M’sia, Scientex, Sarawak Oil Palms) – 18/12/14
GENM (4715), SCIENTX (4731), SOP (5126)
Genting Malaysia Fails NY Casino License Bid
Genting Malaysia has failed to win a casino licence in upstate New York (NY). The NY state board had chosen three developers that excluded any bids in Ulster county and Orange county where both of Genting Malaysia’s bids were located.
However, CIMB Equities Research stated that the group will remain an ‘Add’ as valuations remain compelling. Although it has lowered its realised net asset value-based target price, it feels that the share price is unlikely to react negatively as consensus had not imputed any contribution from NY.
It also said that investors should stay invested in Genting Malaysia because they can still look forward to the opening of 1) the new 20th Century Fox theme park expected in early 2016; 2) Sky Avenue and Plaza in 2016 and 3) Genting Premium Outlets in Awana in late 2015 as well as 4) new gaming capacity in tandem with the expansion in hotel rooms.
Significance: CIMB Research said that Genting Malaysia remains its top pick in the gaming sector, adding that the earlier than expected opening of the theme park and additional table capacity in Genting Highlands will be potential re-rating catalysts.
Sarawak Oil Palms Terminates RPT Deal
Sarawak Oil Palms has aborted a RM134.9 million related party deal to acquire a 60 percent stake in DD Pelita Sebungan Plantation and Mutiara Pelita Genaan Plantation from Double Dynasty (DDSB) and Mutiara Hartabumi (MHSB).
The decision comes as DDSB and MHSB failed to secure consent from the Ministry of Land Development for the sale and transfer of their sale shares.
As a result, the group’s proposed RM4.3 million acquisition of a 34.9 hectare land located at Bintulu, Sarawak has also been aborted as a result since it was conditional on the DD Pelita and Mutiara Pelita deal going through.
Significance: The company is currently contemplating its next course of action, which would include, amongst others, the recovery of the deposit and the cessation of Sarawak Oil Palms’ representative as a director in DD Pelita and Mutiara Pelita.
Scientex Net Profit Up 3% To RM30m
Scientex reported a 3.1 percent rise in net profit to RM30.3 million for the first quarter ended 31 October 2014. The better performance was attributable to positive uptake of new launches and higher revenue recognition from ongoing developments.
A final dividend of RM0.013 has been approved at the group’s annual general meeting, which brings total dividend declared for FY14 to RM0.021. The figure translates to a payout ratio of 31.7% of FY14 earnings.
Group managing director Lim Peng Jin noted that profitability was lower due to the company’s market penetration strategy to establish its presence in new markets across South East Asia. He added that the firm will still ably navigate the current financial year because of its strategic mix of both affordable and value-added products.
Significance: Scientex is optimistic of its long-term prospects and will not only continue to develop innovative products for the needs of diverse buyers, but also emphasise on delivering more affordable housing to meet sustained demand in Johor. It expects these expansion efforts to enhance manufacturing efficiency and reflect favourably on its results in the long run.
http://www.sharesinv.com
GENM (4715), SCIENTX (4731), SOP (5126)
Genting Malaysia Fails NY Casino License Bid
Genting Malaysia has failed to win a casino licence in upstate New York (NY). The NY state board had chosen three developers that excluded any bids in Ulster county and Orange county where both of Genting Malaysia’s bids were located.
However, CIMB Equities Research stated that the group will remain an ‘Add’ as valuations remain compelling. Although it has lowered its realised net asset value-based target price, it feels that the share price is unlikely to react negatively as consensus had not imputed any contribution from NY.
It also said that investors should stay invested in Genting Malaysia because they can still look forward to the opening of 1) the new 20th Century Fox theme park expected in early 2016; 2) Sky Avenue and Plaza in 2016 and 3) Genting Premium Outlets in Awana in late 2015 as well as 4) new gaming capacity in tandem with the expansion in hotel rooms.
Significance: CIMB Research said that Genting Malaysia remains its top pick in the gaming sector, adding that the earlier than expected opening of the theme park and additional table capacity in Genting Highlands will be potential re-rating catalysts.
Sarawak Oil Palms Terminates RPT Deal
Sarawak Oil Palms has aborted a RM134.9 million related party deal to acquire a 60 percent stake in DD Pelita Sebungan Plantation and Mutiara Pelita Genaan Plantation from Double Dynasty (DDSB) and Mutiara Hartabumi (MHSB).
The decision comes as DDSB and MHSB failed to secure consent from the Ministry of Land Development for the sale and transfer of their sale shares.
As a result, the group’s proposed RM4.3 million acquisition of a 34.9 hectare land located at Bintulu, Sarawak has also been aborted as a result since it was conditional on the DD Pelita and Mutiara Pelita deal going through.
Significance: The company is currently contemplating its next course of action, which would include, amongst others, the recovery of the deposit and the cessation of Sarawak Oil Palms’ representative as a director in DD Pelita and Mutiara Pelita.
Scientex Net Profit Up 3% To RM30m
Scientex reported a 3.1 percent rise in net profit to RM30.3 million for the first quarter ended 31 October 2014. The better performance was attributable to positive uptake of new launches and higher revenue recognition from ongoing developments.
A final dividend of RM0.013 has been approved at the group’s annual general meeting, which brings total dividend declared for FY14 to RM0.021. The figure translates to a payout ratio of 31.7% of FY14 earnings.
Group managing director Lim Peng Jin noted that profitability was lower due to the company’s market penetration strategy to establish its presence in new markets across South East Asia. He added that the firm will still ably navigate the current financial year because of its strategic mix of both affordable and value-added products.
Significance: Scientex is optimistic of its long-term prospects and will not only continue to develop innovative products for the needs of diverse buyers, but also emphasise on delivering more affordable housing to meet sustained demand in Johor. It expects these expansion efforts to enhance manufacturing efficiency and reflect favourably on its results in the long run.
http://www.sharesinv.com
