Sept 27 th - Friday Stocks To Watch Scientex, TM, Axiata, Digistar, AirAsia, HELP, Handal, Johan

Stocks To Watch Scientex, TM, Axiata, Digistar, AirAsia, HELP, Handal, Johan
Business & Markets 2013
Written by Ho Wah Foon of theedgemalaysia.com
Thursday, 26 September 2013 19:12

KUALA LUMPUR (Sept 26): Based on news flow and corporate announcements, stocks that might move tomorrow could include Scientex, TM, Axiata, Digistar, AirAsia, HELP, Handal and Johan.

Scientex Bhd’s net profit for the fourth quarter ended July 31, 2013, rose 29.4% to RM30.26 million from RM23.38 million a year earlier, due mainly to an increase in manufacturing and property revenues.
Scientex declared a special dividend of 10 sen per share and proposed a final dividend of 9 sen per share.

The company said its revenue for the quarter jumped 64.3% to RM371.24 million, from RM226.01 million a year earlier.

Earnings per share was 13.83 sen, compared to 10.88 sen on 2012, while net assets per share was RM2.84.

For the financial year ended July 31, Scientex’s net profit rose 31.4% to RM110.28 million from RM83.91 million on the back of a record revenue of RM1.23 billion compared to RM881.02 million a year earlier.

TELEKOM MALAYSIA BHD [] may come under scrutiny after Fitch Ratings warned that the telco’s operating funds as a portion of its debt is nearing a level which warrants a rating downgrade.

In a rating note today, Fitch said TM's 2013 funds flow from operations (FFO)-adjusted net leverage ratio will be about 1.7 to 1.8 times. This is close to the ratio of two times -- the point at which Fitch may downgrade its rating for TM.

"Leverage will remain around this level in 2014 and 2015 as we expect TM to generate minimal free cash flow. Low ratings headroom,” Fitch said.

Fitch has affirmed TM's long-term foreign-currency issuer default rating (FC IDR) at “A-“. The rating comes with a Negative outlook. It has also affirmed TM's FC senior unsecured rating at "A-".

Axiata Group Bhd announced that its Indonesian subsidiary XL Asiata has entered into an agreement to take over PT AXIS Telekom Indonesia (AXIS).

As consideration, XL Axiata will pay the seller US$100 for the Indonesia telco and will also pay off the Indonesia telco’s debts of US$865 million (RM2.8 billion).

Axiata’s unit PT XL Axiata Tbk (XL) today entered into a conditional sale and purchase agreement with Saudi Telecom Company (STC) and its unit Teleglobal Investments B.V. (Teleglobal) to acquire 95% of PT AXIS Telekom Indonesia (AXIS).

This deal will enable XL to reach out to over 65 million customers in Indonesia and turn XL into a leader in the country’s telecommunications industry.

The proposed acquisition, expected to be completed by 31 March 2014, is expected to contribute positively to the future earnings of the Axiata group in the medium to long term, the company said.

DIGISTAR CORPORATION BHD [] has introduced a developed security system, called Panther 911' -- a licensed Central Monitoring System (CMS) Command Centre.

Digistar's managing director Datuk Wira Lee Wah Chong expects the product to contribute positively to the group's top and bottomline from financial year ending September 31, 2014.

"We target to have 500,000 subscribers within the next five years and the pricing will be affordable for all segments of society," Lee said today.

AIRASIA BHD []’s 40% unit AirAsia India has received the “no objection certificate” (NOC) from the Civil Aviation Ministry of India, clearing the way for it to start its operations in India.

"I am thrilled to announce that AirAsia India has received NOC approval from the government of India.
Very exciting and hugely profitable," tweeted AirAsia’s group chief executive officer Tan Sri Tony Fernandes.

The NOC means AirAsia India would now be able to import aircraft into its base in Chennai, Tamil Nadu.

The next move for AirAsia India would be to apply for an airline licence from aviation regulator Directorate-General of Civil Aviation (DGCA). Once that is done, then the airline operations can kick-off.

AirAsia India is a 40:30:21 joint venture between AirAsia Bhd, Tata Sons and Arun Bhatia’s Telestra Tradeplace Pvt Ltd.

HELP INTERNATIONAL CORPORATION [] Bhd (HELP) said its net profit for the third quarter ended July 31, 2013, improved to RM442,000, from RM330,000 a year ago.

Revenue also rose to RM28.0 million, from RM25.4 million.

“The growth in revenue and profit before tax were largely due to the increase in student enrolment,” said the company in its filing with Bursa Malaysia.

For the nine months ended July 31, the group’s revenue rose 4% year-on-year to RM90 .4 million but net profit fell to RM7.4 million from RM9.0 million.

The decrease in profit was due to higher personnel cost after it recruited expatriate teachers for HELP International School in Subang, the company said.

Handal Resources Bhd has secured an RM18 million contract for oil/gas refinery maintenance service.

In a statement to the exchange today, Handal said its wholly-owned subsidiary Handal Engineering Sdn Bhd has received the letter of award from Kemaman Bitumen Co Sdn Bhd.

Handal said the contract involves "engineering, procurement, CONSTRUCTION [] and commissioning of crude distillation unit/vacuum distillation unit revamp work for Kemaman Bitumen Refinery".

"The contract’s effective commencement date is 1st October 2013 for a contract period of seven (7) months. The contract price is at the fixed, non-escalating, lump sum price of RM17,995,000.00)," Handal said.

Handal said the contract is expected to contribute positively to its financials for the years ending December 31, 2013 and 2014.

JOHAN HOLDINGS BHD [] continued to stay in the red although its net loss for the second quarter (2Q) ended July 31, 2013, shrunk to RM6.6 million from RM9.8 million a year ago, due to higher revenue mainly from its “Diners” card business and property development.

Revenue for the period rose 16.1% to RM84.19 million as compared to a lower RM72.5 million from the previous year, said the company.

“The card business targets to further expand its Buy Now Pay Later programme, corporate cards base and engage in anti-attrition programme to expand its card base. Diners Club is embarking on brand awareness campaign to encourage members’ spending," it said.

The company is expected to perform better in current year, its statement said.

The group’s business includes provision of hospitality, charge and credit cards services in Malaysia, Singapore and New Zealand.