Aug 26th - Stocks To Watch Zecon, Scomi, Can One, JTI, Globetronis, Thong Guan, MWE, Sunway, Choo Bee

Stocks To Watch Zecon, Scomi, Can One, JTI, Globetronis, Thong Guan, MWE, Sunway, Choo Bee
Business & Markets 2013
Written by Ho Wah Foon of theedgemalaysia.com  
Friday, 23 August 2013 19:58

KUALA LUMPUR (Aug 23): BASED on corporate announcements today, stocks to watch on Monday (Aug 26) could include Zecon, Scomi, Can One, JTI, MWE, Globetronis, Thong Guan, Sunway and Choo Bee.

ZECON BHD [] said its unit Zecon Medicare Sdn Bhd has been awarded a government concession worth RM606 million to undertake the CONSTRUCTION [] of a children’s hospital and to carry out asset management for 30 years.

The concession agreement signed with the Ministry of Education and Universiti Kebangsaan Malaysia is in relation to the planning, financing, development…and commissioning of facilities/infrastructure of the hospital and to carry out the asset management Services.

Under the terms of the agreement, the concession is for 30 years and the construction cost is RM606 million.

The construction for the project is expected to be completed within 54 months from the commencement of the construction period.

SCOMI GROUP BHD [] reported a net profit of RM1.48 million in the first quarter ended June 30, 2013 (1QFY14) on revenue of RM377.49 million.

As Scomi Group and its subsidiaries have changed their financial year end to March 31 from December 31, there are no comparative figures from a year earlier.

Scomi Group's 72%-owned subsidiary SCOMI ENGINEERING BHD [] posted a net loss of RM16.48 million on revenue of RM56.62 million.

However another 66%-subsidiary Scomi Energy Services Bhd reported a net profit of RM23.52 million on revenue of RM320.87 million.

Looking ahead, Scomi Group said it "remains optimistic" of benefiting from the growth in oil & gas exploration and production specifically in the South East Asia region.

Can One Bhd's net profit for the second quarter ended June 30 fell about 50% to RM17.3 million, from RM34.9 million in the previous corresponding quarter.

The group said the reduction in earnings was due to a one-off bargain purchase of RM21.4 million arising from acquisition of investment in associates.

Revenue for the quarter was RM221.2 million, versus RM201.4 million in 2QFY12.

Looking ahead, the group expects all its operating divisions and investment in associate to contribute positively to its current year results.

GLOBETRONICS TECHNOLOGY [] BHD [] has declared a single-tier second interim dividend of 10% per ordinary share of RM0.50 and a single-tier special dividend of 8% per share for the financial year ending December 31, 2013.

This is higher than the rate of dividend declared for the corresponding period in the financial year ended 31 December 2012, the company told Bursa Malaysia.

“The higher dividend declared is attributed to the encouraging financial and cash flow performance of the group in the previous financial year,” said the company.

JT International (JTI) Bhd posted a net profit of RM30.9 million for the second quarter to end-June 2013, compared with RM29.4 million achieved in similar period last year.

Revenue rose to RM325.2 million, from RM303.8 million, the company informed Bursa Malaysia.

The tobacco company announced a dividend of 11 sen per share for shareholders.

JTI said the increase in revenues for the quarter was mainly attributed to a 1.8% increase in sales volume.

It added the slightly higher profit for the quarter was driven by higher sales, increased net margins and better product mix, which was offset partially by higher marketing investments.

For the remainder of 2013, JTI expects the operating environment to remain challenging due to the continued impact of certain local brands selling below the government mandated minimum cigarette price and the high prevalence of illegal cigarettes.

THONG GUAN INDUSTRIES BHD []'s net profit fell 28% to RM5.31 million in the second quarter ended June 30, 2013 (2QFY13) from RM7.33 million a year earlier.

The plastic products manufacturer told the exchange that revenue, however, climbed to RM178.94 million from RM152.27 million.

Looking ahead, the group said it is confident of continuous progressive contribution from its business units.

MWE HOLDINGS BHD [] posted a 22% fall in its net profit to RM9.2 million for the second quarter ended June 30, from RM11.8 million in the previous corresponding quarter. Revenue was also lower at RM81.3 million, from RM131.8 million.

The group said the fall in revenue was due to the disposal of its lighting division.

Looking ahead, MWE said the group's revenue and profitability for the current financial year will be mainly driven by its textile business.

The implementation of minimum wage will have impact on textile as well as other subsidiaries’ profitability, it said in its filing.

Sunway Bhd’s unit Sunway Construction Sdn Bhd has been awarded a contract worth RM282.9 million for the development of the 'Urban Wellness' mixed development by Pulau Indah Ventures Sdn Bhd.

Pulau Indah Ventures is a joint venture between Khazanah Nasional Berhad and Temasek Holdings (Private) Limited.

The 'Urban Wellness' project is a 5-acre site in Medini North, Iskandar Malaysia. CapitaLand Limited of Singapore is the project manager.

The project is expected to commence on September 1, and completed by October 31, 2015 with a construction period of 26 months. 'Urban Wellness' will include two phases of mixed residential and commercial buildings as well as a 4-story carpark.

"It is expected to contribute positively to the earnings of Sunway Group from the financial year ending 31 December 2014 onwards," said Sunway.

Choo Bee Metal Industries Berhad has more than doubled its net profit year-on-year (y-o-y) to RM5.2 million for the second quarter ended June 30, 2013, from RM2.4 million.

The group attributed higher net profit to lower raw materials cost resulting from incentives and rebates received on quantity purchases.

Meanwhile, the group’s 2Q revenue fell 4.6% or RM5.9 million to RM121.3 million from RM127.2 million a year earlier.

Looking ahead, the group foresees challenges in the form of slipping global steel prices (Q2 onwards), higher import prices and the uncertainty associated with the impending SIRIM policy on material testing.