Insas associate Inari gets Bursa Securities nod to list on ACE Market

Insas associate Inari gets Bursa Securities nod to list on ACE Market
Written by Surin Murugiah of theedgemalaysia.com
Friday, 25 February 2011 11:17


KUALA LUMPUR: Inari Bhd, an electronic manufacturing services (EMS) provider in the semiconductor industry, has been given the nod by Bursa Malaysia Securities Bhd to list on the ACE Market.

In a statement on Friday, Feb 25, Inari said it was expected to list in the second quarter on 2011. Inari is a 44% associated company of Main Market-listed INSAS BHD [].

Its managing director Dr Tan Seng Chuan said since the company’s inception in 2006, it had not only positioned itself as a leading EMS player in the RF segment of the semiconductor industry, but also grown rapidly in capacity and revenue.

“The group’s strong growth necessitates our listing exercise to raise funds for future expansion,” said Tan.

The company provides semiconductor packaging services for global players in radio frequency (RF) mobile industry, which include backend wafer processing and RF testing.

Its finished products are System in Package (SiP) and Quad Flat No-Lead (QFN), key components used in the manufacturing of a wide range of electronic products

Inari said its products were used mainly in the wireless telecommunications, including smartphones and medical sectors, with its customer base including Avago Technologies Trading Limited, Vigsys Sdn Bhd, Ceedtec Sdn Bhd and Newict (M) Sdn Bhd.

Paramount advances after 4Q strong earnings, boost from Jerneh Insurance sale

Paramount advances after 4Q strong earnings, boost from Jerneh Insurance sale
Written by Joseph Chin of theedgemalaysia.com
Friday, 25 February 2011 11:33


KUALA LUMPUR: Shares of Paramount Corp Bhd was among the top gainers in the morning on Friday, Feb 25 after it announced a strong set of earnings, which were boosted by the 20% equity in Jerneh Insurance Bhd and higher margins achieved in property development.

At 11.28am, Paramount rose 34 sen to RM4.85 with 345,200 shares done.

The FBM KLCI rose 2.98 points to 1,492.85, off the early high of 1,499. Turnover was 522.46 million shares valued at RM620.44 million. There were 386 gainers, 278 losers and 248 stocks unchanged.

On Thursday, Paramount said while 4QFY10 revenue was at RM102.9 million, a slight decline from RM104.5 million a year ago, profit before tax of RM87.1 million was substantially higher compared with RM22.0 million a year ago.

This 296% increase was attributed to a gain of RM60.8 million recognized on the disposal of the Group’s 20% equity in Jerneh Insurance and higher margins achieved in property development.

It also said FY10 revenue grew by 7% to RM432.3 million from RM404.9 million recorded in FY09 the previous year while profit before tax grew by 123% to RM177.1 million from RM79.3 million in FY09.

Discounting the gain from the disposal of Jerneh Insurance, it said the group’s core businesses, that is property development, CONSTRUCTION [] and educational services contributed to 47% of the growth in profits.

Boustead 4Q net profit up 41% to RM208.9m, declares 12c dividend

Boustead 4Q net profit up 41% to RM208.9m, declares 12c dividend
Tags: Boustead Holdings Bhd

Written by Surin Murugiah of theedgemalaysia.com
Friday, 25 February 2011 14:21


KUALA LUMPUR: BOUSTEAD HOLDINGS BHD []'s net profit rose 41.4% to RM208.9 million for the fourth quarter ended Dec 31, 2010 from RM147.7 million a year ago due mainly to notable increase in revenue from both the PLANTATION [] and trading divisions.

It said on Friday, Feb 25 revenue for the quarter rose to RM1.69 billion from RM1.48 billion. Earnings per share were 22.22 sen while net assets per share was RM4.50. It declared a fourth interim single tier dividend of 12 sen per share, to be paid on March 31 this year.

For the year ended Dec 31, 2010 Boustead’s net profit jumped 57.3% to RM537.5 million from RM341.6 million in 2009, while revenue grew to RM6.18 billion from RM5.39 billion.

Commenting on its prospects, Boustead said although the Malaysian economy was projected to grow at a steady pace in 2011, and the outlook for the other regional economies was also expected to be favourable, it was bracing itself for yet another challenging year ahead, as the global economies may be badly hit in the event of a large sovereign debt default in Europe in addition to the short-term monetary policies tightening by China and India.

It said plantation's earnings will very much be dependent on palm oil prices which are expected to stay at attractive levels in 2011, largely due to the low supply situation brought on by adverse weather conditions and the expected increase in demand.

It said the heavy industries division's prospects would be underpinned by contracts on hand, and the finalisation of the value and duration of the project to construct six naval vessels will be positive for earnings.

“The property division can look forward to stable recurring income from its portfolio of commercial and retail PROPERTIES [] and the expansion of the hotel operations.

“The addition of PHARMANIAGA BHD [] in the coming year will enable the group to take advantage of the Pharmaniaga brand and infrastructure to grow revenue and profit in the lucrative pharmaceutical business. The other divisions are expected to perform satisfactorily in 2011,” it said.

Lonpac to focus on S'pore, Cambodia ops

Lonpac to focus on S'pore, Cambodia ops
By Rupinder SinghPublished: 2011/02/28


GENERAL insurer Lonpac Insurance Bhd is putting on hold its plans to venture into other overseas countries to focus on growing its operations in Cambodia as well as Singapore.

A wholly-owned subsidiary of LPI Capital Bhd (8621), Lonpac currently has operations in Singapore and Cambodia.

"Cambodia has been a success story and represented a learning curve for us. The challenge now for us to build our market share in Cambodia further," Lonpac's adviser Tee Choon Yeow told Business Times.

In three years since it started business in Cambodia, the insurer has gained 20 per cent market share where the total industry gross premium is only US$20 million (RM61 million) shared among six insurers.
Lonpac aims to capture a 35 per cent market share in Cambodia in the next five years while generating a return on equity of 25 per cent.

Lonpac has consecutively made underwriting profits from the first year in Cambodia and therefore sees a lot of potential in the kingdom.

In 2010, Lonpac's regional business in Cambodia contributed a net profit share of RM743,000.

Domestic operations contributed 98.9 per cent of the group's profit before tax last year.

LPI Capital and Public Bank Bhd (PBB) have a common shareholder in Tan Sri Teh Hong Piow, who is also chairman of PBB and non-executive chairman of LPI Capital.

Lonpac operations in Cambodia is via Campubank Lonpac Insurance Plc, a joint venture company with PBB.

Lonpac is planning to open another branch in Siem Reap this year when business volume is big enough and aims to tap into PBB's customer base.

PBB unit Cambodian Public Bank plc has carried out commercial banking business in Cambodia since May 1992 and currently has 20 branches strategically located in the country.

For its Singapore branch, he said its business portfolio had been restructured to underwrite more personal lines businesses from the volatile motor insurance previously.

The move is expected to help the Singapore unit to break even and show a small underwriting profit.

Although the Cambodia and Singapore units are still not a significant contributors, Tee expects both ventures to contribute 20 per cent to the group in five years. - By Rupinder Singh


http://www.btimes.com.my/Current_News/BTIMES/articles/lonpac24/Article/#ixzz1FCmQzCDw

'Expensive' shares: Do not look at how high the share price is. It is the valuation that counts.

Quick Comment: 'Expensive' shares

Some time ago, I had a conversation with my ASX remisier based in Australia and I think some of his comments are worth sharing.

*Me refers to myself when I was speaking to him.
*Investssmart is also myself but from my point of view now.

Me: Good shares in Malaysia are expensive.
Remisier: What do you mean by expensive? When you say expensive, do you mean in absolute terms or in terms of valuation? When I say it is expensive, it normally means overvalued or fully valued. Some companies can trade at $30 but we still call them cheap.
Investssmart: This is very true. The word expensive should be used more carefully when talking about shares. The absolute value does not really count. A Mercedes for $100k is 'cheaper' than a Waja for $60k. It is the value that counts.

Me: Malaysians' perception is that the higher the share price is, the more it can drop.
Remisier: That happens all the time. It is important to remember that we should look at the movements in terms of percentage. If a $50 company can drop to $5, a $5 company can drop to 5c as well. The important thing is to fix the absolute amount you invest. Purchasing 100 shares in a $50 company is the same as purchasing 1000 shares in a $5 company. If both rise by 10%, you will still earn the same amount of $500 no matter which company you invest it. 
Investssmart: We should not be put off by the share price. It is the valuation that we should worry about. The chances of IRIS to drop from 90c to 20c is higher than the chances of BKAWAN dropping from $7.80 to $2. But somehow, if you give investors just these two choices, many would rather invest in IRIS because they think it is 'cheaper'!

Remisier: Do you remember me recommending you Rio Tinto ($30), BHP ($15), Woodside ($20) and Cochlear ($25)? You did not purchase any either! Perhaps, this changed your view on 'expensive' stocks!
Investssmart: These four stocks have skyrocketed since his recommendation. They are now about $75, $30, $45 and $50 respectively. Never say that upside of highly priced shares are limited. There is no such thing. Upside of overvalued/expensive shares is limited but upside of highly priced shares is not. Although I did not purchase these shares, it was not because I was scared of the high prices. It was mainly because I did not have the strong confidence in the commodity bull and sadly, I was proven to be wrong. Could have made tonnes more from the ASX. Nevertheless, in a bull market, almost everything on the ASX rose.


Me: I did not buy those few but I still bought some highly priced ones. What would I be trading if I don't buy any highly priced shares? I don't remember you ever recommending me any penny stocks!
Remisier: Good stocks are normally highly priced because the demand for good stocks is very strong. Lowly priced shares are normally those that are speculative or not performing. 
Investssmart: It is strange but true to a certain extent. Of course, it does not apply to all company shares.

Strange but could be true: I don't think it is a coincidence that most of the true blue chips throughout the world are trading at high prices. Most of these blue chips have been there for ages. It had to start off somewhere as a smaller company and it takes time to reach where it is today. If the company was trading at $1 ten years ago, it will probably trade at $10 today to be considered a top performer. Otherwise, it would not be considered a blue chip.

Fundamental based investors always look at companies that have excellent track records and therefore, end up investing in highly priced shares. That is because it is very rare that we can get such companies at low prices as share prices should have risen as companies perform well over the years. I doubt fundamental based investors would be interested in companies that trade at low prices over the last few years because that means that they probably do not have a good track record. Of course, this does not apply to all shares but I believe that it is true to a certain extent.



Conclusion: Do not look at how high the share price is. It is the valuation that counts.

http://investssmart.blogspot.com/2006_04_01_archive.html

Malaysians must be critical and analytical in their Political thinking. Which Party is more Progressive?

Guan Eng to Gerakan : Don't assume Penangites are stupid

Choppy waters still for Maybulk

Choppy waters still for Maybulk

Written by Joy Lee
Thursday, 24 February 2011 12:20


KUALA LUMPUR: Grey clouds continue to loom over the prospects of the Baltic Dry Index and companies related to the carriage of dry bulk goods such as Malaysian Bulk Carriers Bhd (Maybulk).

“To be very frank, I think it [the BDI] is going to remain weak going forward. Over the last few months, due to the flooding problems, the market has picked up. But for how long or if it is going to pick up further, we are not sure,” Maybulk’s executive chairman Teo Joo Kim said at a media briefing yesterday.

The BDI, which tracks various drybulk rates over routes on a time charter and voyage basis, peaked at 11,793 points in May 2008 but collapsed shortly after to as low as 663 points in December due to the global financial crisis. The index averaged at 2,758 points in 2010, a 5% improvement from the average of 2,617 points in 2009.

The index has been on a downtrend but picked up slightly at the start of February this year. Nonetheless, industry observers have not been optimistic of its prospects.

Chief executive officer Kuok Khoon Kuan said the BDI has been largely dragged down by the Capesize segment, referring to vessels which are too big to ply the Panama and Suez Canals and have to circle the Cape of Good Hope in Africa and Cape Horn in Chile, South America.

Kuok added that the tankers market is expected to remain weak, which has already affected Maybulk’s earnings.

For the fourth quarter ended Dec 31, Maybulk posted net profit of RM67.7 million, a 23% decrease year-on-year from RM88.45 million in the previous corresponding quarter. Revenue, however, rose 2.6% to RM84.73 million from RM82.61 million.

For the full year, net profit slipped 2% to RM238.37 million from RM243.8 million in FY09 due to weak tanker earnings and lower contribution from associate, PACC Offshore Services Holdings Pte Ltd (POSH) which declined by 72% to RM18.2 million from RM63.9 million in the previous year due to reduced activities in the oil and gas sector and oversupply of vessels in the service sector.

Overcapacity remains a concern for the industry, Kuok said. Additionally, Kuok said the hike in oil prices could derail economic recovery which spells a bleak outlook for the industry.

“In the past two years, the industry has been very concerned about oversupply. But the Lehman Brothers incident brought about a fair bit of cancellation and slippage. Therefore the huge worry of overcapacity did not happen,” Kuok said.

However, the group noted that there were a lot of new ship yards in China and South Korea which were desperate for orders and this may lead to competitive pricing and more new orders.

Maybulk is expecting two new handysize vessels and four long-term charter vessels to join its fleet from now till 2013. Currently, the group has 14 vessels comprising 11 bulk carriers and three tankers.

Teo noted that quite a number of its medium- and long-term charter contracts, which were carried forward at good rates, were coming to an end and these contracts could be renewed at lower rates.

“If the market doesn’t improve, then [Maybulk may see lower contribution from its bulk revenue this year compared to last year],” he said.

But he expects the O&G sector to pick up after a very weak showing in 2010.

Other than its shipping arm, Maybulk has 21.23% equity interest in Singapore based PACC Offshore Services Holding Group.

Maybulk has proposed a dividend of 10 sen for FY10 which is lower than the 15 sen paid for FY09. The company’s stock closed at RM2.76, slipping two sen.


This article appeared in The Edge Financial Daily, February 24, 2011.

Coastal Contracts 4Q net profit marginally stronger

Coastal Contracts 4Q net profit marginally stronger

Written by Financial Daily
Thursday, 24 February 2011 11:57


KUALA LUMPUR: Coastal Contracts Bhd’s net profit for 4QFY10 ended Dec 31 rose 3% to RM55.66 million from RM54.03 million a year ago, underpinned mainly by the delivery of higher end vessels.

In a filing with Bursa Malaysia yesterday, the group said revenue climbed 35% to RM203.4 million from RM150.9 million previously, while posting basic earnings per share of 15.36 sen versus 14.97 sen for the previous corresponding period. No interim dividend was declared for 4Q. Costal’s net assets per share stood at RM1.66.

For FY10 ended Dec 31, the group’s net profit surged 24% to RM200.87 million from RM162.44 million in FY09 on the back of improved revenue of RM675.25 million versus RM466.05 million in FY09.

On its prospects, Coastal expects a “reasonably satisfactory” financial performance for 2011 backed by the strong revenue visibility of the shipbuilding division’s vessel sales order book.

Shares in Coastal yesterday added 11 sen to close at RM2.71 with turnover of 706,100 units.


This article appeared in The Edge Financial Daily, February 24, 2011.

PetGas 3Q net profit up 50.4% to RM400m on higher gas processing revenue

PetGas 3Q net profit up 50.4% to RM400m on higher gas processing revenue
Written by Surin Murugiah of theedgemalaysia.com
Tuesday, 22 February 2011 19:30


KUALA LUMPUR: PETRONAS GAS BHD [] (PetGas) net profit increased 50.4% to RM400.74 million for the third quarter ended Dec 31, 2010 from RM266.47 million a year ago driven by higher gas processing and gas transportation revenue.

It said on Tuesday, Feb 22 that revenue rose 10% to RM892.69 million from RM810.89 million. Earnings per share were 20.25 sen while net assets per share was RM4.14.

For the nine months ended Dec 31, PetGas’s net profit rose 58.2% to RM1.17 billion from RM739.5 million a year ago while its revenue increased by 8.67% to RM2.63 billion from RM2.42 billion.

Commenting on its prospects, PetGas said revenue from the new fee structure under the gas processing and transmission agreement (GPTA) hinged on the volume of the gas processed at the gas processing plants as well as volume of gas delivered directly into the pipeline network.

“The performance based structure will continue to provide PetGas with additional earnings potential which is dependent on the level of production of by-products and their prices,” it said.

As internal gas consumption is provided by Petronas, PetGas’s exposure to fuel gas price fluctuation is eliminated, it said.

“The revised terms under the GPTA do not introduce new operating risks to PGB; it better defines the obligations of the parties to the GPTA.

“Prospects for the utilities business will depend on the pace of economic recovery. Any variation in gas price will be reflected in the pricing to customers,” it said.

Parkson 2Q net profit up 16.8% to RM93.8m, to speed up expansion

Parkson 2Q net profit up 16.8% to RM93.8m, to speed up expansion
Written by Surin Murugiah of theedgemalaysia.com
Tuesday, 22 February 2011 20:47

KUALA LUMPUR: PARKSON HOLDINGS BHD [], which reported RM93.8 million in earnings in the second quarter, plans to accelerate its expansion plan in the countries which operates and targets to add on average 20% new operating area to its portfolio.

It said on Tuesday, Feb 22 the 2Q earnings in the quarter ended Dec 31, 2010 was a 16.8% increase from RM80.31 million a year ago, driven by year end festivities and the holiday season.

Parkson, which operates in Malaysia, China and Vietnam, said revenue rose 6.7% to RM756.38 million from RM709.32 million a year ago. Earnings per share were 8.67 sen while net assets per share was RM1.89.

Commenting on its prospects, Parkson said its retail operations were expected to continue to record satisfactory results in the next quarter in view of the expected higher spending during the Chinese New Year festivities.

For the six months ended Dec 31, Parkson said gross sales proceeds rose 7.9% to RM4.554 billion from a year ago backed by improved same store sales growth in all three countries (Malaysia 10%, China 11% & Vietnam 23%).

“Operating profit increased by 9.0% to RM410.8 million and net profit attributable to the Group improved by 17.2% to RM170.0 million. Basic earnings per share were RM0.16, which grew by 11.9% over the same period of last year.

“As a result of the appreciation of ringgit against Chinese renminbi and Vietnamese dong, lower operating results were consolidated into the group,” it said.

Parkson said excluding the impact of the currency translation, on a comparable basis, the group's gross sales proceeds increased by 15.7% to RM4.884 billion as compared to the preceding year’s corresponding period.

Accordingly, on comparable basis, operating profit increased by 17.4% to RM442.6 million and net profit attributable to the group increased by 25.4% to RM181.8 million.

“In line with the improving macro economic outlook, the group believes domestic consumption will underpin the economic growth in all the countries it operates in.

“On the back of such expectations, the group is accelerating its expansion plan and is targeting to add on average 20% new operating area to its portfolio,” it added.

Parkson said it would focus on improving its market share in existing markets or entering into nearby markets by leveraging on the strength of its flagship store in cities or markets in which the group has established a strong presence with strong brand equity.

It added that attention would also be given to relatively affluent cities or new markets in order to further expand the group’s network and brand image.