April 18th Thur - Stocks To Watch BAT, Zhulian, JCY, KPJ, Mitrajaya, Paramount and gloves sector

Stocks To Watch BAT, Zhulian, JCY, KPJ, Mitrajaya, Paramount and gloves sector
Business & Markets 2013
Written by Ho Wah Foon of theedgemalaysia.com
Wednesday, 17 April 2013 20:04


A + / A - / Reset
KUALA LUMPUR (Apr 17): Based on news flow and corporate announcements today, the stocks that may attract trading interest tomorrow (May 18) could include BAT, Zhulian, JCY, KPJ, Mitrajaya, Paramount and gloves sector.

BRITISH AMERICAN TOBACCO (M) [] Bhd (BAT) expects 2013 to be another good year for the company as it has the right strategies in place.

It said it will be implementing branding strategies to increase its growth momentum and market share.

The group has increased its presence in the market by 1.6% to record a third consecutive year of share growth, achieving 62.6% of the white cigarette market.

According to BAT’s managing director, Datuk William Toh, this was driven by strong growth in Dunhill.

“We have a very robust brand strategy in place that comes with good processes and infrastructure,” Toh told reporters after the group’s AGM.

“We have recorded very good performance this year so far. We believe we have the right strategy in place for another year of good performance,” he said.

“If the illicit cigarette problem could be decreased this year, it is safe to expect better volume growth for 2013,” he added.

ZHULIAN CORPORATION BHD [] reported that its net earnings for 1QFY13 was RM29.75 million, up 4.76% from RM28.4 million in the previous corresponding period, due to higher income from investments.

Revenue, however, was 2.82% lower at RM108.72 million against 1QFY12’s RM111.88 million.

Zhulian said the lower revenue was caused by a drop in its local market’s sales. The group also has sales operations in Thailand, Singapore and Indonesia.

Zhulian declared a first interim dividend of three sen per share for 1QFY13, the same as the previous corresponding quarter. Its net assets per share, meanwhile, improved to 99.22 sen from 98.23 sen.

On prospects, the group said it has targeted a positive revenue growth for this financial year.

JCY International Ltd suffered a major blow today when CIMB Research announced that it was ceasing research coverage on the leading international hard disc drive (HDD) manufacturer.

“We are stopping research coverage on JCY due to the deteriorating operating environment and uncertainty over the group’s earnings prospects. We expect margins to come under pressure from competition and rising labour costs,” wrote Terence Wong, CIMB’s analyst.

He noted JCY is facing higher minimum wages in ASEAN as well as China, and the outlook for PC shipments and HDD sales is poor.

Wong added that market researcher TrendFocus forecasts that global HDD shipment will contract over the next three years by 0.7-2.4%. “This will be negative for HDD suppliers like JCY,” he said.

KPJ HEALTHCARE BHD [] said its unit Kumpulan Perubatan (Johor) Sdn Bhd has entered a sale and purchase agreement to buy over Rawang Specialist Hospital Sdn Bhd (RSHSB) for RM50.6 million.

The proposed acquisition would enable KPJ to expand its network of hospitals, enlarge customer base and further establish itself as a key healthcare service provider in Malaysia, KPJ said.

KPJ expects to complete the acquisition by the end of the fourth quarter of 2013.

Currently, Optimax Healthcare Services Sdn Bhd is holding 56% of RHSB’s shares. MITRAJAYA HOLDINGS BHD [] and Wilayah Kontact Sdn Bhd each holds 20% shares of RHSB while Registec Sdn Bhd has a 4% shares in RHSB.

Mitrajaya, in a separate filing to Bursa, said based on the unaudited financial position of the Mitrajaya group at end-2012, the proposed divestment would increase the earnings per share from 4.64 sen to 5.53 sen.

PARAMOUNT CORPORATION BHD [] plans to acquire more land in the Klang Valley to expand its landbank, executive deputy chairman Datuk Teo Chiang Quan told reporters today.

Teo said Paramount's proposed land acquisitions will add on to the firm's 779 acres of undeveloped tracts.

"We are looking to develop land in Sungai Petani, Bukit Banyan in 2014," Teo said after the company's AGM.

Paramount's education segment will also improve in anticipation that the new campus will be established by 2015, he said.

Rubber glove manufacturers may see their stocks luring trading interest again with the latest news from China on bird flu. Shares of TOP GLOVE CORPORATION BHD [] jumped 14% to RM6.69 per unit today.

Two more people in China have died from a new strain of avian influenza, bringing to16 the number of deaths from the H7N9 virus, and the government has warned that the number of infections could rise, Reuters reported today.

The latest victims were from the commercial capital of Shanghai, where the majority of the 77 cases have been found, the official Xinhua news agency reported.

The exact source of infection remains unknown and no human-to-human spread of the virus has been confirmed.

Samples have tested positive in some birds in poultry markets that remain the focus of investigations by China and the U.N.'s Food and Agriculture Organization (FAO).

"Because the source of the infection has not been effectively controlled, it is possible that the number of cases of infections could continue to rise," Xinhua said, quoting a risk assessment of the virus by the National Health and Family Planning Commission.