Aug 29th - Stocks To Watch Daya Materials, AMMB Holdings, UMW Holdings, Sunway, Dayang, QL Resources

by **Cals** Mon 25 Aug 2014, 03:33

Stocks To Watch Daya Materials, AMMB Holdings, UMW Holdings, Sunway, Dayang, QL Resources

Business & Markets 2014

Written by Foo Yen Ne and Liew Jia Teng of theedgemalaysia.com

Friday, 22 August 2014 21:30

KUALA LUMPUR (Aug 22): Based on news flow and corporate announcements today, the stocks that may be in focus on Monday (Aug 25) may include: Daya Materials, AMMB Holdings, UMW Holdings, Sunway, Dayang and QL Resources.

Integrated oil and gas company Daya Materials Bhd, which plans to buy two offshore subsea construction vessels for US$280 million (RM888.2 million) cash, will undertake three major fund raising exercises to part-finance the substantial acquisitions.

In a filing with Bursa Malaysia today, Daya Materials said it will place out up to 25% stake, rights issue with free warrants to raise RM230 million. It will also issue a seven-year redeemable convertible secured bonds of up to RM120 million.

Shares of Daya Materials were suspended with effect from 2.30pm today, pending the announcement of the substantial acquisition(s).

Daya Materials said it had signed two memoranda of agreement with Siem Offshore Rederi AS (SORA) to acquire the offshore subsea construction vessels.

The two dynamic positioning class 2 (DP2) vessels, dubbed Siem Daya 1 and Siem Daya 2, each will cost Daya Materials USD140 million (RM444.1 million).

Besides, Daya Materials will also pay an additional US$2.3 million (RM7.3 million) for a 50 tonnes active heave compensation 3,000m crane.

Daya Materials said the proposed acquisitions will enable the group to own and operate the vessels, instead of chartering the vessels from SORA.

It will also further enhance the operating cost structure of the vessels, which is expected to contribute positively to the future profitability of the group.

AMMB Holdings Bhd’s net profit rose 16.2% to RM536.94 million in the first quarter ended June 30, 2014 (1Q FY15), from RM461.98 million a year earlier, underpinned by the divestment gain from it’s approximately 50% partnership stake in AmLife Insurance Bhd and AmFamily Takaful Bhd.

The banking group’s revenue grew 8.3% to RM2.58 billion, from RM2.38 billion.

On its future prospects, AMMB group managing director Ashok Ramamurthy said the bank anticipates some headwinds in the business environment with further industry consolidations, intensifying competition and rising compliance requirements.

“We will stay focused on our strategic priorities and disciplined execution, to remain on course in delivering sustainable growth,” he said in a press statement today.

UMW Holdings Bhd’s unit, UMW Engineering Services Ltd, has secured RM200 million worth of contracts to supply more than 60 units of Komatsu mining equipment to jade miners in Hpakant, Myanmar.

The company said it is confident of securing more orders for Komatsu in Myanmar, as the Indochina state is expected to lift a ban on jade mining activities in September.

UMW has had a market presence in Myanmar since 1999 and owns the exclusive franchise for the distribution of Komatsu heavy equipment in Malaysia, Singapore, Myanmar and Papua New Guinea.

Property construction conglomerate Sunway Bhd will establish a RM2 billion sukuk programme, with tenure of seven years.

The group told the bourse that it will issue Islamic commercial papers (ICPs) and Islamic medium term notes (IMTNs).

Sunway said RM30,000 of the proceeds raised will be channeled to fund the trustee’s reimbursement account, as required under the Securities Commission’s trust deed guidelines.

The money raised will also be used to finance investment activities, capital expenditure, working capital requirements, as well as other general corporate purposes, including future operating expenses and financing expenses. It will also be used to repay future borrowings.
RAM Rating Services Bhd has assigned a preliminary rating of P1(s) for the ICPs and A2(s) for the IMTNs.

Dayang Enterprise Holdings Bhd, a homegrown maintenance and support services provider for the oil and gas industry, reported a net profit of RM54.63 million in the second quarter ended June 30, 2014 (2Q FY14), 54.8% higher than RM35.28 million a year ago.

It also declared a first interim tax-exempt dividend of 3.5 sen, payable on Oct 10 this year.

The group’s quarterly revenue almost doubled from RM111.57 million to RM221.69 million, due to higher value of work orders received and performed for its new hook-up and commissioning contracts.

In a filing with Bursa Malaysia today, Dayang said despite a 99% revenue growth, its quarterly pre-tax profit only increased by 59%, because of lower profit margin contribution from the work orders performed.

For the six-month period, Dayang’s net profit declined 4.6% to RM89.36 million, from RM93.67 million a year before. However, its revenue doubled to RM399 million, from RM199.49 million.

Going forward, Dayang remains positive of its prospects, as the group has call out contracts at about RM4.5 billion to last at least until 2018. It also has an outstanding tender book of about RM400 million.

Moreover, it said its associate company, Perdana Petroleum Bhd, will continue to register steady earnings with the improving marine charter outlook.

Poultry producer QL Resources Bhd expects to maintain a double-digit growth in top line and bottom line, for the financial year ending March 31, 2015 (FY15), driven by its marine product manufacturing and integrated livestock farming businesses.

After QL Resources’ annual general meeting today, its managing director Chia Song Kun told the reporters that the group is expanding its business into aquaculture, with a possibility of increasing its fishmeal products export.

Regional expansion is also on the cards, as QL Resources is on the lookout for suitable companies located in Malaysia, Indonesia and Vietnam, for acquisitions.

QL Resources saw its net profit grow 15.42% to RM40.36 million in the first quarter ended June 30, 2014 (1Q FY15), from RM34.95 million a year ago. The group’s revenue also increased 12.8% to RM653.56 million, from RM579.64 million a year before.