Stocks In Focus MY (Hektar REIT, KESM Industries, RHB Capital) – 17/04/15
HEKTAR (5121), KESM (9334), RHBCAP (1066),
17 April 2015
Hektar REIT To Focus On Organic Growth
Retail-focused Hektar Real Estate Investment Trust (REIT) is focusing on organic growth, as it plans to acquire more individual lots in its strata-titled malls this year. The engine for growth in 2015 will be a combination of organic growth and acquisitions.
Asset enhancement initiatives (AEI) which include refurbishment and expansion exercises will be undertaken on a continual basis as such initiatives will normally translate into higher rental and allows the REIT to attract better tenants or high-paying tenants.
Updating on its projects, the refurbishment of Central Square mall is expected to be completed by 2Q15. The firm has also started work to increase the number of cinema screens in Mahkota Parade from four to ten at a cost of RM15 million and will do its due diligence and identify which malls it thinks should be next to undergo AEI.
Significance: Hektar REIT also shared that it is actively looking at acquiring neighbourhood malls, though nothing has been decided yet. Going forward, the managers of the REIT is optimistic of the REIT’s performance this year, despite uncertain external demand and consumer spending habits post goods and services tax implementation in April.
KESM To Inject More Capital Into Semiconductor Unit
KESM Industries plans to inject more capital into its semiconductor devices testing unit, KESM Test (M), once it completes the RM35 million acquisition of the remaining 34.6 percent stake it does not own in the latter.
The firm notes that current economic condition is conducive for such acquisition in the semiconductor industry and foresees that the industry is set to grow further.
Through KESM Test (M), the group provides semiconductor burn-in and testing of semiconductor integrated circuits and assembly of electronic components to the automotive industry, among others. The growth prospect of the automotive industry is said to be good.
Significance: The acquisition is in line with KESM Industries’ strategy to grow the testing business, which requires a high capital investment, and will also allow it to focus more in the automotive market amid the growing opportunities.
Speculations On RHB Disposing Insurance Arm
RHB Capital, which is undertaking a major corporate restructuring, may dispose of or reduce its interest in its insurance arm, RHB Insurance to further unlock value in the group. Sources have said that the insurance arm contributed only 3 percent of the group’s earnings.
Under a corporate restructuring announced on 13 April, RHB Bank will be acquiring from the group its entire equity interest in RHB Investment Bank, RHB Insurance and the assets and liabilities of the other operating subsidiaries of the group, transforming the RHB banking group into a bank “holding company” structure.
Currently, the group controls 94.7 percent of RHB Insurance and the entire stake in RHB Bank. An analyst said that the RHB Capital’s focus to be a regional banking group would not fit well if it had both banking and the insurance business in its stable.
Significance: The trend now is for banks to tie up with a partner who is a dedicated insurance player and the disposal of the group’s insurance arm would allow it to better manage its costs which would facilitate its expansion plans in investment, corporate, commercial and Islamic
http://www.sharesinv.com
HEKTAR (5121), KESM (9334), RHBCAP (1066),
17 April 2015
Hektar REIT To Focus On Organic Growth
Retail-focused Hektar Real Estate Investment Trust (REIT) is focusing on organic growth, as it plans to acquire more individual lots in its strata-titled malls this year. The engine for growth in 2015 will be a combination of organic growth and acquisitions.
Asset enhancement initiatives (AEI) which include refurbishment and expansion exercises will be undertaken on a continual basis as such initiatives will normally translate into higher rental and allows the REIT to attract better tenants or high-paying tenants.
Updating on its projects, the refurbishment of Central Square mall is expected to be completed by 2Q15. The firm has also started work to increase the number of cinema screens in Mahkota Parade from four to ten at a cost of RM15 million and will do its due diligence and identify which malls it thinks should be next to undergo AEI.
Significance: Hektar REIT also shared that it is actively looking at acquiring neighbourhood malls, though nothing has been decided yet. Going forward, the managers of the REIT is optimistic of the REIT’s performance this year, despite uncertain external demand and consumer spending habits post goods and services tax implementation in April.
KESM To Inject More Capital Into Semiconductor Unit
KESM Industries plans to inject more capital into its semiconductor devices testing unit, KESM Test (M), once it completes the RM35 million acquisition of the remaining 34.6 percent stake it does not own in the latter.
The firm notes that current economic condition is conducive for such acquisition in the semiconductor industry and foresees that the industry is set to grow further.
Through KESM Test (M), the group provides semiconductor burn-in and testing of semiconductor integrated circuits and assembly of electronic components to the automotive industry, among others. The growth prospect of the automotive industry is said to be good.
Significance: The acquisition is in line with KESM Industries’ strategy to grow the testing business, which requires a high capital investment, and will also allow it to focus more in the automotive market amid the growing opportunities.
Speculations On RHB Disposing Insurance Arm
RHB Capital, which is undertaking a major corporate restructuring, may dispose of or reduce its interest in its insurance arm, RHB Insurance to further unlock value in the group. Sources have said that the insurance arm contributed only 3 percent of the group’s earnings.
Under a corporate restructuring announced on 13 April, RHB Bank will be acquiring from the group its entire equity interest in RHB Investment Bank, RHB Insurance and the assets and liabilities of the other operating subsidiaries of the group, transforming the RHB banking group into a bank “holding company” structure.
Currently, the group controls 94.7 percent of RHB Insurance and the entire stake in RHB Bank. An analyst said that the RHB Capital’s focus to be a regional banking group would not fit well if it had both banking and the insurance business in its stable.
Significance: The trend now is for banks to tie up with a partner who is a dedicated insurance player and the disposal of the group’s insurance arm would allow it to better manage its costs which would facilitate its expansion plans in investment, corporate, commercial and Islamic
http://www.sharesinv.com
