Dec28-Companies in the news Multi-Code, DRB-Hicom, MBSB, BHIC, Silk, WCT, BTM Resources, Guocoland, MAHB, Iris, EG Industries, and Protasco

by **Cals** Mon 28 Dec 2015, 05:15

Companies in the news

[size=28]Multi-Code, DRB-Hicom, MBSB, BHIC, Silk, WCT, BTM Resources, Guocoland, MAHB, Iris, EG Industries, and Protasco

By Meena Lakshana / theedgemarkets.com | December 23, 2015 : 10:45 PM MYT

KUALA LUMPUR (Dec 23): Based on corporate announcements and news flow today, companies in focus on Monday (Dec 28) are Multi-Code, DRB-Hicom, MBSB ([You must be registered and logged in to see this image.] Valuation: 2.55, Fundamental: 1.20), BHIC ( Valuation: 0.30, Fundamental: 0.45), Silk, WCT, BTM Resources, Guocoland, MAHB ( Valuation: 2.00, Fundamental: 0.80), Iris, EG Industries, and Protasco.

Multi-Code Electronics Industries (M) Bhd ([You must be registered and logged in to see this image.] Valuation: 0.90, Fundamental: 1.45) has signed contracts worth RM240 million with Perusahaan Otomobil Nasional Sdn Bhd (Proton) to supply electronics parts for the national carmaker for five years.

Multi-Code said in a Bursa Malaysia filing that it will supply Proton cars with anti-theft systems, parking sensors, power regulator systems, functional switches, and ignition key set systems beginning in the second and third quarters of its financial year ending July 31, 2016.

The estimated initial investment outlay was RM1.55 million, it added.

Multi-Code is principally involved in the manufacturing and supply of car alarm systems, central locking and power window regulators.

In its latest quarterly results ended Oct 31, 2015 (1QFY16) that it also announced today, it made a net profit of RM143,000 against a net loss of RM1.84 million in the previous year, which it attributed to a higher revenue of RM22.41 million, up 10.23% from before.

The increase in revenue was mainly due to high demand for original equipment manufacturer (OEM) products in the quarter under review, it added.

On prospects, it said it is facing a slowdown in demand from its OEM customers in an increasing cost environment that has been compounded by the weakening ringgit and the implementation of the goods and services tax.

As such, its board is cautious of the challenging operating conditions of the automotive sector.

DRB-Hicom Bhd ([You must be registered and logged in to see this image.] Valuation: 2.00, Fundamental: 0.00) is seeking a one-month extension from Bank Negara Malaysia (BNM) to conclude the negotiations of the proposed merger between Bank Muamalat Malaysia Bhd and Malaysia Building Society Bhd (MBSB).

In a filing with Bursa, DRB-Hicom said it has submitted an application to BNM for an extension of time from Dec 30, 2015 to Feb 2, 2016 for the parties to conclude the negotiations.

DRB-Hicom said it has also been informed that MBSB has also made (a) similar application to BNM on the same day.

On Oct 2, the central bank gave MBSB and Bank Muamalat the approval to begin merger talks, a move that reportedly would pave the way for the creation of the country's biggest stand-alone Islamic bank.

DRB-Hicom took over Bank Muamalat in 2008.

Separately, DRB-Hicom clarified that the price tag of S$317 million for its 90% interest in Corwin Holding Pte Ltd, the owner of The Verge shopping mall in Singapore, was on a willing-buyer willing-seller basis that took into account the shopping mall's market value of S$140 million.

The market value was recorded as at March 31, 2015, based on its current usage, said DRB-Hicom in a filing today.

The Securities Commission Malaysia (SC) had asked the conglomerate to furnish the details on how the value of S$317 million came about, taking into account Corwin's audited and unaudited net assets as at March 31, 2015 and Nov 30, 2015, as well as the agreed value of The Verge.

This follows DRB-Hicom's announcement on Monday that the group, together with Corwin's minority shareholdersMohamed Mustafa & Samsuddin Co Pte Ltd (MMS) and BI Distributors Pte Ltd, had agreed to sell Corwin to Evolutyon Real Estate Investment Holding Pte Ltd.

On DRB-Hicom's end, it stands to pocket S$189.07 million from the S$317 million sale. The group had said earlier it planned to use the sale's proceeds for its working capital.

DRB-Hicom today explained that the working capital will be used for, among others, payment of trade creditors, interest expenses, administrative expenses and its businesses' operating expenditures.

The SC had also inquired how The Verge's value of S$295.6 million was agreed upon, and whether any valuation was carried out on the eight-storey shopping mall. DRB-Hicom said the value came after deducting the sales transaction expenses of around S$21.4 million from the indicative consideration of S$317 million.

"No independent valuation was carried out on The Verge for the purpose of the proposed disposal," DRB-Hicom said.

Boustead Heavy Industries Corp Bhd (BHIC) is disposing of three chemical tankers to Jasa Merin (Labuan) Plc for a combined US$17.1 million (RM73.47 million) or US$5.7 million (RM24.49 million) each.

BHIC said it plans to use the sale proceeds to further reduce its existing loan and borrowings.

In a filing with Bursa, BHIC said its wholly-owned subsidiaries — BHIC Marine Carriers Sdn Bhd, BHIC Marine Ventures Sdn Bhd, and BHIC Marine Transport Sdn Bhd — have signed separate memoranda of agreement with Jasa Merin (Labuan) for the proposed sale.

Jasa Merin (Labuan) is a wholly-owned subsidiary of Jasa Merin (M) Sdn Bhd, which in turn is 70% owned by Silk Holdings Bhd ([You must be registered and logged in to see this image.] Valuation: 0.30, Fundamental: 0.20).

The three 7,000-tonne tankers comprised Chulan 1, Chulan 2, and Chulan 3. The vessels were built in 2011 and are currently in operation.

BHIC said the disposal is in line with its restructuring and rationalisation exercise and is expected to result in a net loss of RM12 million to BHIC Group for the financial year ending Dec 31, 2015.

The proposed sale of the vessels is expected to be completed by Feb 29, 2016.

In a separate filing, Silk Holdings said the acquisition of the three tankers offers an opportunity to diversify into other marine and O&G related business, specifically the downstream segment of the O&G industry, and is expected to contribute positively to group's future earnings once deployed.

It will fund the purchase consideration through a combination of internal funds and borrowings.

Construction and property development group WCT Holdings Bhd is selling a boutique hotel located in Bandar Bukit Tinggi 2, Klang, Selangor, to its managing director Taing Kim Hwa via his private vehicle, Beyond Century Sdn Bhd, for RM16.1 million.

In a filing with Bursa Malaysia, WCT said Gemilang Waras Sdn Bhd, a wholly-owned subsidiary of WCT Land Sdn Bhd, which in turn is a wholly-owned unit of WCT, yesterday signed a sale and purchase agreement with Beyond Century for the proposed sale.

Gemilang Waras is the developer of "The Lead" at Bandar Bukit Tinggi 2, a freehold integrated commercial development that comprises two towers of serviced apartments, a boutique hotel and commercial retail shops.

Taing is a major shareholder of WCT, as well as a director of Gemilang Waras.
Spanning 4.171ha, WCT said the eight-storey boutique hotel features 98 rooms together with 34 car park bays. It is currently under construction.

WCT expects to complete the sale of the hotel by the fourth quarter of 2018.

BTM Resources Bhd ([You must be registered and logged in to see this image.] Valuation: 0.30, Fundamental: 1.65), via its subsidiary BTM Marketing and Trading Sdn Bhd (BTMMT), is exploring the possibility of being the master franchisor of fast food chain operator Chicken Cottage (M) Sdn Bhd (CCSB) in Johor and Singapore.

In a filing with Bursa today, BTM Resources said the memorandum of understanding (MoU), signed between BTMMT and CCSB on Dec 17, stipulates that pending both parties' due diligence, negotiation and execution of a definitive agreement between the parties, the companies have agreed to enter into the MoU to record their understanding and intention in respect of the potential cooperation.

BTM Resources is principally involved in the logging, saw milling and trading of sawn timber, logs and plywood.

BTM Resources said the MoU serves as a starting point for further business exploration as BTMMT intends to seek new business opportunities to increase its revenue.

Guocoland (Malaysia) Bhd ([You must be registered and logged in to see this image.] Valuation: 2.40, Fundamental: 1.10), the property investment arm of Hong Leong Group (Valuation: 2.55, Fundamental: 2.20), has appointed Datuk Kong Woon Jun, 52, as its managing director (MD) effective Jan 4, 2016, following the resignation of Tan Lee Koon, 41, who will assume another position in the Hong Leong group.

Prior to his appointment, Kong was formerly the group MD of Tropicana Corp Bhd ([You must be registered and logged in to see this image.] Valuation: 3.00, Fundamental: 1.50).

He has more than 26 years of experience in the property development and construction industries, starting out his career as a senior architect in BEP Arkitek Sdn Bhd, in charge of high-end property developments in 1994.

Malaysia Airports Holdings Bhd (MAHB) said the Istanbul Sabiha Gokcen International Airport (ISGIA) in Turkey, which it owns, experienced explosions in the wee hours this morning, injuring two airline employees.

In a statement by the airport operator, the explosion occurred at 2.10am Turkish time at the tarmac area of the airport.

It said the police are checking and securing the airport area, while the Aviation Security Council has also been alerted on the situation.

The Turkish government has also stepped up security within the vicinity of the airport, which includes helicopter surveillance.

The airport resumed normal operations at around 4am Turkish time.

Iris Corporation Bhd ([You must be registered and logged in to see this image.] Valuation: 0.90, Fundamental: 0.35) said its patent infringement litigation in Germany has been amicably resolved. In a statement dated Dec 22, Iris said it had resolved the matter with Cross Match Technologies Inc over the latter's use of document scanner devices including the relevant software development kits in Germany.

Iris Corp said the settlement included the grant of a non-exclusive licence to Cross Match under Iris' European patent to manufacture, offer, sell and distribute document scanner devices in Germany, France, the United Kingdom and the Netherlands.

Iris said that the financial details and other specific terms of the settlement agreement were confidential and will not be disclosed.

EG Industries Bhd ([You must be registered and logged in to see this image.] Valuation: 1.50, Fundamental: 1.10) plans to invest about RM30 million to expand its plant by 50% to boost its electronic manufacturing services (EMS) capacity, including its box-build segment.

EG Industries group chief executive officer Alex Kang told reporters after its annual general meeting today that the new capacity would be dedicated to plastic injection moulding operations which would expand its scope of EMS to include box-build, complementing its current expertise in printed circuit board assembly.

He also said the plan will accord the company greater capacity to serve larger clientele.

He said the capital expenditure for the expansion including machinery acquisition would be funded from proceeds raised through the rights issue exercise that was recently completed.

It expects the new capacity to come online in the third quarter of FY16.

Protasco Bhd ([You must be registered and logged in to see this image.] Valuation: 1.40, Fundamental: 1.40) (has secured a three-year contract worth around RM75 million fromMinistry of Works Malaysia to provide forensic engineering services beginning Jan 1, 2016.

In a filing with Bursa, Protasco said its wholly-owned subsidiary Kumpulan Ikram Sdn Bhd has received a letter of appointment from the ministry for its appointment as the service provider.

Ikram is to provide forensic engineering services on slopes and slope related structures for a period of three years, with an option to renew for a further two years, at an estimated contract price of RM25 million per annum, subject to actual consumption of the ministry pursuant to the Master Service Agreement.

The services rendered will cover all slopes failure throughout Malaysia, except for federal roads, roads that are currently under privatised concession agreements (toll roads) and those pending completion by the government or government agencies, the company said.

Protasco expects the appointment to contribute positively to its future earnings and net assets.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
[/size]