Stocks to watch: Aviation-linked stocks may be affected by haze

by **Cals** Mon 17 Mar 2014, 12:41

Business & Markets 2014

Written by Ho Wah Foon of theedgemalaysia.com

Monday, 17 March 2014 09:48

KUALA LUMPUR: Aviation-linked stocks such as Air-Asia Bhd, Malaysia Airports Holdings Bhd and Malaysian Airline System Bhd (MAS) may be affected if the current hot weather and haze continue to envelop the country.

AirAsia last Friday announced flight cancellations to and from Pekanbaru, Indonesia, for Friday and Saturday due to the low visibility caused by severe haze.

“The presence of thick haze reduces pilot visibility to below 1,000m, which is the minimum level of flight visibility required for safe operations,” said the low-cost carrier in a statement.

The cancellation of AirAsia flights from and to Pekanbaru involved six routes. AirAsia also said all affected flights was expected to resume yesterday, depending on visibility.

Mah Sing Group Bhd aims to increase its sales by 20% to RM3.6 billion this year from RM3 billion last year, managing director Tan Sri Leong Hoy Kum told the media last Friday.

He said projects, with a total gross development value (GDV) of RM4 billion to be launched this year, would help the group realise the target, reported Bernama.

At the extraordinary general meeting last Friday, Mah Sing’s shareholders voted in support of the group’s land acquisition in Pasir Gudang.

The 1,352 acres (547ha) of freehold land is expected to have an estimated GDV of RM5 billion. The land was acquired for RM411.16 million.

“With the acquisition of a plot of land in Shah Alam and the endorsement to buy land in Bandar Meridin East, Mah Sing’s total land bank now is 2,818 acres, with a GDV of RM26.82 billion.

“Now, Mah Sing has a total unbilled sales and remaining GDV worth RM31.26 billion, inclusive of RM4.44 billion unbilled sales or 2.6 times revenue from the property development in 2013,” said Leong.

Karex Bhd is spending about RM80 million to build a new factory in Pontian as part of its expansion plan. The company now has factories in Port Klang and Hat Yai in Thailand.

Chief executive officer Goh Miah Kiat said the new factory, to be built on a 7.28ha site, is slated for completion by year-end.

He said rising awareness of the importance of condom use and growing global population were driving demand for condoms going forward. Last year, 22.8 billion condoms were sold.

The group has a combined production capacity of four billion condoms currently.

“We target to achieve a production capacity of six billion pieces by end-2015,” Goh told Bernama after the company’s extraordinary general meeting.

He said Karex, which has a 10% share in the global condom market, is expected to show good growth this year.

For the six-month period ended Dec 31, 2013, Karex posted a pre-tax profit of RM27.37 million from RM17.96 million in the same period last year, whilerevenue rose to RM147.58 million against RM118.69 million previously.

Boustead Heavy Industries Corp Bhd’s (BHIC) subsidiary Boustead Penang Shipyard Sdn Bhd has secured an RM108 million contract from Murphy Sarawak Oil Co Ltd for the fabrication of offshore Belum topsides.

The BHIC unit announced that the project was for the provision of engineering, procurement, construction and commissioning of offshore topsides for Block SK309 Belum Satellite-A Platform, in Phase Two of the Sarawak Gas Development project.

The contract is targeted for completion by June 2015.

The successful completion of the contract would further solidify BHIC’s reputation in the area and enable it to tap more opportunities within the dynamic sector not only locally but abroad, said the company.

Sime Darby Bhd has acquired a controlling 70% stake in Australia’s mining maintenance services firm TFP Engineering Pty Ltd for A$3.2 million (RM9.5 million).

TFP’s prized asset is its “Pakka Jacks” jacking-lifting system, used for the maintenance of mining equipment.

Sime Darby said its wholly-owned subsidiary Haynes Mechanical Pty Ltd purchased the stake from TFP’s owners Gaylene Elaine Poke and Tony Francis Poke last month.

“The acquisition will enable Haynes to expand its labour hire opportunities from its existing geographical presence in Queensland and Western Australia to the New South Wales coal basin, Tasmania and South Australia,” Sime Darby said.

According to Sime Darby, the firm has the call option to buy the remaining 30% in TFP for A$1.8 million (RM5.3 million).

TAS Offshore Bhd announced that its wholly-owned subsidiary has secured a contract for the sale of one unit of utility tug valued at RM13.2 million.

“The vessel was sold to one of our new foreign customers. The vessel is expected to be delivered in April 2015,” said TAS Offshore.

The company said the revenue generated from the contract would contribute positively to the earnings and net assets of TAS Group for the financial years ending May 31, 2014 and 2015.

This article first appeared in The Edge Financial Daily, on March 17, 2014.