Stocks In Focus MY (MMHE, OSK Ppty Hldgs, Tiong Nam Logistics) – 20/04/15
20 April 2015
MMHE Faces Challenging Times
Malaysia Marine and Heavy Engineering Holdings (MMHE) is facing challenging times, considering its depleting order book and a need to increase the utilisation of its massive fabrication yard in Johor.
However, the Petroliam Nasional-controlled company is currently sitting on a healthy balance sheet with total borrowings of RM265 million, while cash and cash equivalent almost double that at RM589 million. Sitting on a net cash position puts the company on a strong footing to bid for jobs, which MMHE feels will start flowing again.
MMHE’s order book stands at RM1.9 billion, keeping the company busy up to the third quarter of 2016. MMHE hopes to land one big project at least by early 2016. Wishing to maintain its current staff strength and third-party contractors, the group conceded that they had to cut 20 percent of its manpower to cope with the challenging environment.
Significance: Moving forward, the firm plans to widen profitability by bidding for more international projects. Meanwhile, it will be focusing on smaller engineering jobs to keep its current workforce and yards running, while searching for contracts beyond Malaysian waters.
OSK Property Expects To Maintain Growth
Bolstered by new project launches worth RM1 billion in gross development value (GDV), OSK Property Holdings expects to maintain growth this year.
The company is looking at unbilled sales of RM800 million that will enable it to secure more or at least the same revenue as 2014.
For the financial year ended 31 December 2014, the property segment increased its revenue to RM668.6 million. The group will be allocating RM100 million for land acquisition.
Significance: Of the RM1 billion GDV, between RM200 million and RM300 million will come from the project in Bandar Puteri Jaya, Sungai Petani, comprising high-end bungalows and semi-detached houses. As of 17 April, the group has a 647.5 hectare landbank worth RM7 billion in GDV.
Tiong Nam Plans Warehouse And More Automation
Tiong Nam Logistics Holdings is planning a multi-storey warehouse salted to be built within three to five years and also investing in more automation to maximise efficiency and control costs, which is increasingly necessary under the tough economic environment.
Multi-storey warehouse offers much more usable floor space per square feet of land, and will allow the firm to operate in a dense urban area, rather than locating it miles from the population centre, cutting transit time and burning less fuel.
The group will invest in more automated storage and retrieval systems (ASRS) for its warehouses to improve efficiency, which contributes to optimising storage space and reducing manpower costs by 50 percent.
Significance : Other than the above mentioned plans, the group, which owns 166 acres of vacant land, is looking to buy more land in prime areas located near to sea ports.The idea of spinning off its assets into a real estate investment trust is also being explored. Tiong Nam also intends to offer delivery services to e-commerce companies, which it sees as a growing but largely untapped market.
http://www.sharesinv.com
20 April 2015
MMHE Faces Challenging Times
Malaysia Marine and Heavy Engineering Holdings (MMHE) is facing challenging times, considering its depleting order book and a need to increase the utilisation of its massive fabrication yard in Johor.
However, the Petroliam Nasional-controlled company is currently sitting on a healthy balance sheet with total borrowings of RM265 million, while cash and cash equivalent almost double that at RM589 million. Sitting on a net cash position puts the company on a strong footing to bid for jobs, which MMHE feels will start flowing again.
MMHE’s order book stands at RM1.9 billion, keeping the company busy up to the third quarter of 2016. MMHE hopes to land one big project at least by early 2016. Wishing to maintain its current staff strength and third-party contractors, the group conceded that they had to cut 20 percent of its manpower to cope with the challenging environment.
Significance: Moving forward, the firm plans to widen profitability by bidding for more international projects. Meanwhile, it will be focusing on smaller engineering jobs to keep its current workforce and yards running, while searching for contracts beyond Malaysian waters.
OSK Property Expects To Maintain Growth
Bolstered by new project launches worth RM1 billion in gross development value (GDV), OSK Property Holdings expects to maintain growth this year.
The company is looking at unbilled sales of RM800 million that will enable it to secure more or at least the same revenue as 2014.
For the financial year ended 31 December 2014, the property segment increased its revenue to RM668.6 million. The group will be allocating RM100 million for land acquisition.
Significance: Of the RM1 billion GDV, between RM200 million and RM300 million will come from the project in Bandar Puteri Jaya, Sungai Petani, comprising high-end bungalows and semi-detached houses. As of 17 April, the group has a 647.5 hectare landbank worth RM7 billion in GDV.
Tiong Nam Plans Warehouse And More Automation
Tiong Nam Logistics Holdings is planning a multi-storey warehouse salted to be built within three to five years and also investing in more automation to maximise efficiency and control costs, which is increasingly necessary under the tough economic environment.
Multi-storey warehouse offers much more usable floor space per square feet of land, and will allow the firm to operate in a dense urban area, rather than locating it miles from the population centre, cutting transit time and burning less fuel.
The group will invest in more automated storage and retrieval systems (ASRS) for its warehouses to improve efficiency, which contributes to optimising storage space and reducing manpower costs by 50 percent.
Significance : Other than the above mentioned plans, the group, which owns 166 acres of vacant land, is looking to buy more land in prime areas located near to sea ports.The idea of spinning off its assets into a real estate investment trust is also being explored. Tiong Nam also intends to offer delivery services to e-commerce companies, which it sees as a growing but largely untapped market.
http://www.sharesinv.com
