Stocks In Focus MY (MBSB, SP Setia, Tropicana Corp) – 16/04/15
MBSB (1171), SPSETIA (8664), TROP (5401),
16 April 2015
MBSB’s Priority To Become Full-fledged Islamic Bank
The priority for Malaysia Building Society (MBSB) in the near term is to close its gap in becoming a full-fledged Islamic bank within five years. The move from being a non-conventional bank to an Islamic bank is to prepare itself for any potential corporate exercise.
Currently, a rough 80 percent MBSB’s assets are Islamic assets. When asked if MBSB would be merging with an Islamic bank, it was claimed logical but any possible merger would require the Employees Provident Fund’s (EPF) approval and laborious study from the board.
For now, the group aims to close its gap to being a full-fledged bank that will meet the regulators’ requirements, by aligning its operations, processes and systems in line with the regulatory framework of the central bank.
Significance: Becoming an Islamic bank is part of MBSB’s business plan and its focus is on quality loan growth rather from a pure number perspective. Additionally, the group targets to grow its corporate segment from 12 percent to 20 percent, with a shift in emphasis to business financing, to mitigate the decline of its personal financing segment.
SP Setia On Track To Post Record Profits
SP Setia is on track to achieving record profits on the back of all-time high unbilled sales which underline strong earnings visibility, according to AllianceDBS Research. The research house believes that the firm’s total unbilled sales of RM11.5 billion can easily last for two years.
The group is also set to enjoy lumpy contributions from its overseas projects, with RM1.5 billion and RM2.3 billion in unbilled sales to be recognised progressively in FY15 and FY16. Based on its conservative recognition of progressive billings for some projects slated for completion this year, AllianceDBS Research has raised its FY15 earnings forecast by 9 percent.
SP Setia has achieved RM1 billion worth of property sales in the 1Q15 (mainly attributable to the Battersea project in London), placing the company on track to achieve its RM4.6 billion sales target for FY15. Domestic sales are expected to pick up in 2H15 as the firm rolls out more launches.
Significance: AllianceDBS Research opines that SP Setia’s township projects will continue to do well given the strong demand for lifestyle landed properties with good infrastructure and amenities. Its low land cost provides strong competitive advantage its peers. The research house has maintained it ‘Buy’ call on the stock with a target price of RM4.10.
Tropicana Sells Non-core Business For RM198m
Tropicana Corporation is disposing its non-core business of manufacturing explosives with the sale of its entire 73 percent shareholding in Tenaga Kimia for RM194.7 million cash, and expects to record a net gain of RM48.5 million.
The stake will be disposed to Austin Powder Asia Pacific, a subsidiary of US-based Austin Powder Holdings where proceeds raised will be utilised for working capital and repayment of bank borrowings of the group.
The proposed disposal would enable the group to realise the gains from an investment that was not considered as strategic and synergistic to the group, also in line with the its de-gearing activities to reduce the borrowing levels of the group.
Significance: Tropicana is said to benefit from interest savings as a result of the utilisation of the sale proceeds to lower borrowings. With its de-gearing initiatives bearing results, the group is placed on a stronger financial footing while it continues to further strengthen its balance sheet by unlocking the value of its land bank.
http://www.sharesinv.com
MBSB (1171), SPSETIA (8664), TROP (5401),
16 April 2015
MBSB’s Priority To Become Full-fledged Islamic Bank
The priority for Malaysia Building Society (MBSB) in the near term is to close its gap in becoming a full-fledged Islamic bank within five years. The move from being a non-conventional bank to an Islamic bank is to prepare itself for any potential corporate exercise.
Currently, a rough 80 percent MBSB’s assets are Islamic assets. When asked if MBSB would be merging with an Islamic bank, it was claimed logical but any possible merger would require the Employees Provident Fund’s (EPF) approval and laborious study from the board.
For now, the group aims to close its gap to being a full-fledged bank that will meet the regulators’ requirements, by aligning its operations, processes and systems in line with the regulatory framework of the central bank.
Significance: Becoming an Islamic bank is part of MBSB’s business plan and its focus is on quality loan growth rather from a pure number perspective. Additionally, the group targets to grow its corporate segment from 12 percent to 20 percent, with a shift in emphasis to business financing, to mitigate the decline of its personal financing segment.
SP Setia On Track To Post Record Profits
SP Setia is on track to achieving record profits on the back of all-time high unbilled sales which underline strong earnings visibility, according to AllianceDBS Research. The research house believes that the firm’s total unbilled sales of RM11.5 billion can easily last for two years.
The group is also set to enjoy lumpy contributions from its overseas projects, with RM1.5 billion and RM2.3 billion in unbilled sales to be recognised progressively in FY15 and FY16. Based on its conservative recognition of progressive billings for some projects slated for completion this year, AllianceDBS Research has raised its FY15 earnings forecast by 9 percent.
SP Setia has achieved RM1 billion worth of property sales in the 1Q15 (mainly attributable to the Battersea project in London), placing the company on track to achieve its RM4.6 billion sales target for FY15. Domestic sales are expected to pick up in 2H15 as the firm rolls out more launches.
Significance: AllianceDBS Research opines that SP Setia’s township projects will continue to do well given the strong demand for lifestyle landed properties with good infrastructure and amenities. Its low land cost provides strong competitive advantage its peers. The research house has maintained it ‘Buy’ call on the stock with a target price of RM4.10.
Tropicana Sells Non-core Business For RM198m
Tropicana Corporation is disposing its non-core business of manufacturing explosives with the sale of its entire 73 percent shareholding in Tenaga Kimia for RM194.7 million cash, and expects to record a net gain of RM48.5 million.
The stake will be disposed to Austin Powder Asia Pacific, a subsidiary of US-based Austin Powder Holdings where proceeds raised will be utilised for working capital and repayment of bank borrowings of the group.
The proposed disposal would enable the group to realise the gains from an investment that was not considered as strategic and synergistic to the group, also in line with the its de-gearing activities to reduce the borrowing levels of the group.
Significance: Tropicana is said to benefit from interest savings as a result of the utilisation of the sale proceeds to lower borrowings. With its de-gearing initiatives bearing results, the group is placed on a stronger financial footing while it continues to further strengthen its balance sheet by unlocking the value of its land bank.
http://www.sharesinv.com
