CIMB, RHB, MBSB, Ivory, SMTrack, TMC Life, Sona Petroleum, CAB Cakaran, and Cycle & Carriage



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KUALA LUMPUR (Jan 14): Based on corporate announcements and news flow today, the companies that may be in focus tomorrow (Thursday, Jan 15) could be: CIMB Group Holdings Bhd, RHB Capital Bhd, Malaysia Building Society Bhd, Ivory Properties Group Bhd, TMC Life Sciences Bhd, SMTrack Bhd, Sona Petroleum Bhd, CAB Cakaran Corp Bhd, and Cycle & Carriage Bintang Bhd.

CIMB Group Holdings Bhd (fundamental score: 1.35; valuation score: 2.1), RHB Capital Bhd (RHBCap) (fundamental score: 1.5; valuation score: 2.1), and Malaysia Building Society Bhd (MBSB) (fundamental score: 1.2; valuation score: 1.6) via a joint statement today, confirmed that they have decided to call off the proposed mega-bank merger.

CIMB acting group chief executive Tengku Datuk Zafrul Abdul Aziz said the three parties ultimately were not able to arrive at a value-creating transaction for all stakeholders.

He added that the decision to cease discussions on the merger and the creation of a mega Islamic bank was arrived after a detailed review of potential synergies.

Ivory Properties Group Bhd (fundamental score: 1.1; valuation score: 2.1) is selling its 21.78ha land in Penang to Jesselton Peak Sdn Bhd, for RM150 million.

Ivory added that the disposal is to unlock its property value, which is not generating income to the group currently.

Medical centre operator TMC Life Sciences Bhd (fundamental score: 2.2; valuation score: 0.3) intends to expand its flagship Tropicana Medical Centre in Kota Damansara.

TMC Life said the first phase of the propose expansion cost is expected to cost up to RM300 million, which includes the construction on the new building and other capital expenditure on equipment and fittings.

Expansion works are expected to commence in first half of 2016 and will take about four years to complete.

Construction will be undertaken on the six-acre land the existing medical centre sits as TMC Life said only 21% of the land had been utilised.

Radio frequency identification solutions provider SMTrack Bhd (fundamental score: 2.25; valuation score: 0.3)'s 94.01% subsidiary Smartag International Inc has terminated its joint venture (JV) agreement with MRH Capital Inc and California Bottling Company Inc due to unsatisfactory due diligence findings.

The agreement was first entered into in October last year, in which Maragh and Thomas would transfer 100% and 75% stakes in MRH Capital Inc and California Bottling Company Inc respectively in a share swap agreement in exchange for a total of 40 million new shares in SII.

Upon completion of the proposed joint venture (JV) agreement, MRH and CBC would have become the subsidiaries of SII.

The proposed JV was originally set to fast track SMTrack's core traceability business in the US.

Special purpose acquisition vehicle Sona Petroleum Bhd (fundamental score: 0.60; valuation score 0) has scrapped its plan to buy two upstream oil and gas assets in thailand for US$281.2 million from UK-listed Salamander Energy plc today.

Sona Petroleum told Bursa Malaysia that it and Salamander intend to mutually terminate the previously announced sale and purchase agreement and other relevant transaction documents in respect to the proposed transaction, which was made in June last year.

The termination follows UK-listed Ophir Energy plc's proposal to acquire Salamander via a share swap. Under the exercise, Salamander shareholders will be entitled 0.6 Ophir share for one Salamander unit held.

Despite the SPA termination, Sona said it was still eyeing potential deals with Ophir and Salamander for a stake in the Bualuang O&G assets.

Poultry player CAB Cakaran Corp Bhd (fundamental score: 0.55; valuation score: 1.2) is confident of registering RM1 billion revenue for its financial year ending Sept 30, 2015 (FY15), following its proposed acquisition of Singapore-based poultry slaughter house Tong Huat Poultry Processing Factory Pte Ltd, which it expects to complete by the end of this month.

CAB Cakaran managing director Christopher Chuah said the confidence was based on FY14 numbers, where the group managed to garnered RM672 million revenue, while Tong Huat had up to SG$38 million (RM102.4 million).

He also pointed out other expansions the group made to boost revenue, including the acquisition of 25 poultry farms in Johor for RM41 million, and the opening two more new supermarkets along East Coast of peninsula by end of FY15.

The group also told Bursa about a RM3.89 million gain on fair value adjustment from its investment properties today.

The revaluation gain, which fell under the financial year ended Sept 30, 2014 (FY14), resulted in an increase of three sen to CAB's net asset per share.

Mercedes-Benz Malaysia Sdn Bhd announced that its sales volume went up 16.5% in 2014, which may court the market's attention tomorrow towards the brand's largest dealer in Malaysia, Cycle & Carriage Bintang Bhd (fundamental score: 1.15; valuation score: 2.40).

Mercedes-Benz Malaysia president and chief executive officer Roland Folger said the company sold 9,419 units in 2014, against 8,062 units in 2013, mainly driven by 46% sales surge contributed from the fourth quarter of 2014.

(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.)