KUALA LUMPUR (Sept 9): Based on corporate announcements and news flow today, the companies that may be in focus tomorrow (Thursday, Sept 10) could include the following: Titijaya, Symphony Life, Land and General, Microlink Solutions, Reach Energy, Axiata Group and GUH Holdings.
Developer Titijaya Land Bhd is targeting a sales of RM400 million for the financial year ending June 30, 2016 (FY16), 20% lower from the RM500 million it achieved in FY15, amid the generally weaker market sentiments.
“We will scale back our launches. We are cautious about the market next year, as there are a lot of uncertainties,” Titijaya’s deputy group managing director (MD) Lim Poh Yit told reporters during a media briefing today.
Lim said there will be three launches in FY16, which will have a collective gross development value of RM400 million.
These launches are: two residential projects — one each in Ara Damansara and Cheras — and a commercial project in Shah Alam.
Lim also said Titijaya is changing its land banking strategy by embarking on developments through partnerships to share risks and preserve cash flow.
As at FY16, the group has a total land bank of 432 acres, valued at RM8.6 billion.
Symphony Life Bhd said performance for current financial year ending March 31, 2016 (FY16) would be worse than the previous year due to slower demand.
Chief operating officer Stewart Tew said Symphony Life was holding back a part of the RM2 billion worth of real estate launches in the Klang Valley to focus on existing projects, in view of the current market. Tew said many existing projects were at the foundation stage.
“Hence, we can only realise the contribution next year. We are deferring some of our launches, due to the weakening of the property sector lately.
“The group is also actively on the lookout for new land bank for future development,” he told reporters after the company’s annual general meeting here today.
Tew said Symphony Life’s deferred launches included projects in Bandar Sunway and Puchong, Selangor. The launches have been postponed until next year or 2017, according to him.
Property developer Land and General Bhd (L&G) said the weakening ringgit against the US dollar will increase the development cost for their future projects by up to 20%, if the situation does not abate soon.
“Costs have been going up progressively over the past two years. The past six months’ development has seen the weakening ringgit and this will impact future contracts awarded as part of the construction materials, some imported raw items or finishing items are quoted in US dollars.
“However, I don’t think the cost increase will be too drastic … it would be somewhere around 10% to 15% range, at most 20%. The bulk of the raw materials used for construction is locally produced. Cement and steel bar are price controlled items. So most of our cost is local,” said L&G MD Low Gay Teck.
He said its current projects are unaffected. On whether the group will pass the price hike to their customers, Low only said it will “adjust the price cost accordingly”.
Meanwhile, it does not see major concerns for its ongoing projects.
“Even in hard times, I don’t foresee major concerns for the group, because we can sell. Our land banks and projects are in prime, mature housing areas. In addition to that, the group have ongoing projects, locked in sales, work in progress and unbilled sales of RM369 million,” said Low.
He also expressed confidence that financial year 2015 (FY15) will see substantial growth for L&G, especially with 50% registered interest in their new yet-to-be launched high-rise, Astoria Ampang.
Computer software provider Microlink Solutions Bhd said today it was unaware of reasons behind its share price spike.
Microlink said this in response to Bursa Malaysia’s unusual market activity (UMA) query yesterday (Sept 8), when its counter spiked 29.5 sen or 33% to close at its intraday high of RM1.18.
Today, the counter gained as much as 19 sen or 16% to RM1.37 before paring most of its gains to settle at RM1.23, still up 5 sen or 4.24%, with 872,500 shares done. Its closing price gives it a market capitalisation of RM152.15 million.
Microlink shares have jumped about 110% this year, significantly outperforming the FBM KLCI’s 9% decline.
Shares in Microlink had risen after director and major shareholder Monteiro Gerard Clair raised his stake in the company.
In a statement yesterday, the company said Clair had acquired a total of 21,000 shares last Thursday and Friday.
He bought 5,500 shares at 92.5 sen each on Thursday and 15,500 units at 91.7 sen a share on Friday.
Reach Energy Bhd, which is still in the midst of securing a qualifying acquisition (QA), saw its net loss for the 12 months ended July 31, 2015 (12MFY15) narrow 61.3% to RM10.98 million, compared to the RM28.38 million it reported a year ago.
In its quarterly report to Bursa Malaysia today, the oil and gas special purpose acquisition company, which changed its financial year end to Dec 31 from July 31, said the loss was mainly due to expenses like management team remuneration, finance costs, travelling costs, and listing expenses.
As it has yet to complete its QA, Reach Energy’s main source of income, which amounted to RM27.6 million in 12MFY15, was derived from interests earned from its fixed deposits.
Commenting on its prospects, the group said it has identified and is in the process of pursuing several “attractive” opportunities.
“The company continues to actively seek control on attractive development and production assets as QA,” Reach Energy pledged.
The group has a three-year time frame to secure a QA, and as at 12MFY15, its remaining cash and bank balances stood at RM767.28 million.
Axiata Group Bhd and Bharti Airtel Ltd (Bharti) are exploring the possibility of combining telecommunication business operations of their subsidiaries in Bangladesh.
According to Axiata’s filing with Bursa Malaysia today, both parties have entered into an exclusive discussion for the abovesaid purpose.
“This announcement is to facilitate the ongoing discussions and exchanges of information between the parties, including but not limited to discussions with the relevant regulatory authorities,” the filing read.
Axiata and Bharti said they will issue further announcement in the event there is any material development on this matter.
Both parties intend to combine the business operations of their telecommunication subsidiaries in Bangladesh, namely Robi Axiata Ltd and Airtel Bangladesh Ltd, the filing stated.
Axiata ventured into the Bangladesh telecommunication field via Robi Axiata Ltd, a joint venture company between Axiata and NTT DoCoMo Inc of Japan.
Bharti entered Bangladesh after it acquired a majority of the shares in Airtel Bangladesh Ltd in 2010.
GUH Holdings Bhd is buying land to develop a light industrial park in Seberang Perai — a plan to cultivate future earnings growth in its property division.
In a filing with Bursa Malaysia, GUH Holdings said its unit GUH Realty Sdn Bhd entered into a sale and purchase agreement (SPA) with Leader Holdings and vendor Thow Gooi Chee to acquire the pieces of land measuring 4.9ha in Ladang Valdor, Seberang Perai Selatan, Penang, for RM22.6 million.
It said the lands, one measuring 2.61ha at RM12.08 million and the other 2.27ha at RM10.5 million, are strategically located in the southern Penang district which has seen the initiation of several government economic programmes such as the Batu Kawan Industrial Park development.
GUH Holdings believes there would be a growing demand for light industrial factories from small and medium size suppliers who would want to be located close to their customers.
“The proposed acquisitions are in line with the ongoing plan of the GUH group to increase and diversify its property land bank in strategic locations with high development value.
“The subsequent proposed development of a light industrial park is part of the GUH group’s continuous effort to increase and sustain its earnings growth in the property development segment,” it said.
It estimated that the proposed acquisition would be completed in six months.
(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.)