Aug 28th - Stocks To Watch JCY Intl, Bumi Armada, KNM Group, Axiata, China Automobile Parts, IGB, Salcon, Kulim

by **Cals** Wed 27 Aug 2014, 23:23

Stocks To Watch JCY Intl, Bumi Armada, KNM Group, Axiata, China Automobile Parts, IGB, Salcon, Kulim

Business & Markets 2014

Written by Gho Chee Yuan of theedgemalaysia.com

Wednesday, 27 August 2014 21:30

KUALA LUMPUR (Aug 27): Based on news flow and corporate announcements today, the stocks that may be in focus tomorrow (Aug 27) could include: JCY International Bhd, Bumi Armada Bhd, KNM Group Bhd, Axiata Group Bhd, China Automobile Parts Holdings Limited (CAP), IGB Corp Bhd, Salcon Bhd and Kulim (M) Bhd.

JCY International Bhd has temporarily shut down its factory operations in Kulai Jaya, Johor, following workers unrest and outbreak of fire on Tuesday.

It says the damage to the factories and properties of the company would not pose any material impact on the financial performance and position of the group, for the quarter ending Sept 30, 2014.

JCY says it is currently taking active steps and measures to address the problems and to reach an amicable settlement with the workers.

Axiata Group Berhad's net profit slump 30.55% year-on-year to RM447.82 million in the second quarter ended June 30, 2014 (2QFY14), from RM644.78 million. Revenue however rose to RM4.73 billion, from RM4.63 billion.

The telecommunications giant said the decline in net profit was mainly due to foreign exchange (forex) losses, integration of Axis’ business in Indonesia and lower contribution from Malaysia.

For the first half of financial year 2014 (1HFY14), Axiata's net profit dropped 11.11% to RM1.12 billion, from RM1.26 billion a year ago, despite revenue increasing 1.5% to RM9.25 billion, against RM9.11 billion in the first half of 2013 (1HFY13).

While it notes that currency volatility is still a concern, it remains optimistic on its outlook, saying, "our business remains strong and we continue to execute strongly on our strategy, to deliver long term growth”.

Offshore oil field service provider Bumi Armada Bhd has priced its proposed rights shares at RM1.35 each, to raise RM1.977 billion.

Bumi Armada told Bursa Malaysia that the rights shares' price was a 32% discount to the theoretical ex-all price (TEAP) of RM1.98, after the group's planned bonus and rights issue.

Bumi Armada's bonus and rights issues involve up to 1.48 billion new shares each. Both exercises are undertaken on the basis of one share for every two existing shares held by entitled shareholders.

KNM Group Bhd posted a 50.4% jump in net profits for its second quarter ended June 30, 2014 (2QFY14) to RM11.12 million, from RM7.39 million a year ago, mainly due to better project contribution margin.

The oil and gas group told Bursa Malaysia that its revenue rose 12.7% to RM489.31 million in 2QFY14, from RM434.09 million a year ago.

For its six months ended June 30, 2014 (1HFY14), KNM reported a two-fold increase in net profits to RM25.29 million, as compared to RM9.61 million a year ago.

Salcon Bhd was pushed into the red in its second quarter ended June 30, 2014 (2QFY14), with a loss of RM4.73 million against a net profit of RM1.32 million a year ago.

This was despite a 122.1% year-on-year increase in its revenue to RM33.27 million, from RM14.98 million.

Nevertheless, for the first half of the financial year 2014 (1HFY14), Salcon's net profit rose more than twofold to RM11.66 million, from RM3.74 million recorded in 1HFY13.

Revenue climbed to RM73.7 million — a 43.97% increased from RM51.19 million for the same period last year.

China Automobile Parts Holdings Limited (CAP) announced it has penned a memorandum of understanding (MOU) with Protev Asia Limited (Protev), a German-based automotive company, to boost the company's future earnings by venturing into the European automotive industry.

CAP's managing director Li Guo Qing hoped the MoU would open more business opportunities for CAP to reach the European market, via the vast network that Protev is equipped with.

In future, both companies intend to form a joint-venture company where CAP will be responsible on the product research & development (R&D) and production activities, whereas Protev will be responsible for operations and product distribution.

To recap, CAP saw its net profit declining 13.56% to RM17.37 million for the second quarter ended June 30, 2014, due to the drop in the average selling prices.

Its revenue edged down by 2.77% to RM101.91 million, compared to RM104.82 million in the last corresponding quarter.

For the six months period ended 30 June 2014, the group's revenue went down 2.95% to RM194.86 million, from RM200.78 million last year. However, net profit grew 7.03% to RM35.6 million, from RM33.26 million.

IGB Corp Bhd’s wholly-owned subsidiary Majestic Path Sdn Bhd (MPSB) has signed a joint venture agreement with Immortal Group Co Ltd and Theekharoj Piamphongsarn, to jointly purchase and develop land in Bangkok, Thailand.

IGB told Bursa Malaysia that the joint venture is to develop 19 freehold plots of land, located at the Bang Sue Subdistrict in Bangkok.

"The land has potential for a mixed project development by virtue of its location. Project funding shall be met by way of advances from the parties, on a pro-rated basis and/or external financing," it said.

Under the agreement, MPSB will acquire a 49% stake in the said development project for RM65.6 million.

The agreements are expected to be completed by the third quarter of this year.

In a separate announcement, IGB said it recorded RM66.56 million in net profit for the second quarter ended June 30, 2014 — a 9.1% increase from the RM61.03 million it recorded last year.

Revenue grew 16.4% to RM293.05 million, from RM251.79 million previously.

Kulim (M) Bhd announced that it has entered into an agreement to relinquish its subsidiary Nexsol (Malaysia) Sdn Bhd, to a subsidiary of major Singaporean oil palm player Wilmar International Ltd.

"We have entered into a share purchase agreement with Wilmar's subsidiary, PGEO Edible Oils Sdn Bhd, for the proposed disposal of the entire equity interest in Nexsol for RM27 million," Kulim told Bursa Malaysia in a statement.

It added that the group has also entered a land transfer agreement with PGEO, for the proposed disposal of a parcel of 30-acre land in Sungai Tiram, Johor, belonging to Nexsol, for RM23 million.

To facilitate the disposal, Kulim said it would undertake an internal restructuring to acquire 510,000 Nexsol shares held by Kulim Energy, representing 51% of the existing issued and paid-up share capital of Nexsol, and subsequently capitalise the advances made by Kulim to Nexsol, amounting to approximately RM120 million, into 120,000,000 Nexsol Shares.

The date and original cost of investment of Kulim in Nexsol is April 30, 2010, and approximately RM134.2 million, respectively.

However, Kulim expects to record a loss of RM4.3 million from the disposal of Nexsol.