STOCK TO WATCH (26/10/10)

PERWAJA

Building the first concentration and pelletising plant to produce iron ore pellets in Malaysia at a cost of RM201.54 million in Kemaman, Terengganu.

CURRENT PRICE = RM1.15 (up 4 sen)

PLUS

UEM Group Bhd and the Employees Provident Fund (EPF) extend the acceptance deadline of the Offer Letter to acquire PLUS Expressways Bhd from 5pm on Oct 29, 2010 to 5pm on Nov 9 this year.

PLUS said the offer would immediately lapse at 5pm on November 9 unless UEM and EPF agree in writing to extend the offer period.

On Oct 15, PLUS received an offer from UEM and the EPF as joint offerors to acquire all its business and undertakings , including assets and liabilities for RM23 billion or RM4.60 per share cash.

CURRENT PRICE = RM4.35 (up 3 sen)

GLOMAC

acquiring 18 units of apartments at the Suria Stonor Condominium project for RM38.41 million.

Glomac unit Berapit Pertiwi Sdn Bhd had agreed to the acquisition with Dekad Darat Sdn Bhd and Progressive Berg Sdn Bhd as it viewed the apartments had an excellent investment opportunity with strong potential for quick turnaround.

CURRENT PRICE = RM1.62 (up 2 sen)

MTD

MTD Capital resumes trading after it was suspended from 9.45am on Monday at the company’s request pending a material announcement.

The company said the material announcement was on the official judgment from the Supreme Court of Philippines pertaining to the Temporary Restraining Order (TRO) on South Luzon Toll Expressway (SLEx).

CURRENT PRICE = RM6.35 (unch)

STOCK TO WATCH 19/10/10 TUESDAY

• SIME file suit on AZRB
• UEMLAND, EPF acquisition PLUS
• DXN net profit increase 33%
• EKUINAS Take Over Konsortium Logistik (KONSORT)
  

STOCK TO WATCH (20/10/10) WEDNESDAY

• MUHIBAH land RM205.8 million Putrajaya job
• HANDAL gets 2 yr extension for Talisman Malaysia contract
• CIMB Thai 3Q net profit down 61%
• delisting notice to STAMFORD COLLEGE
• JETSON look for EGM to remove Chow Chee Kin as Director
• TA global JV to develop Sydney residential project

PETRONAS CHEMICAL GROUP BERHAD

Petronas Chemical is an umbrella company for Petroliam Nasional Bhd’s (Petronas) 22 petrochemical-related companies.

It has a total production capacity of over 11 million tonnes a year and operates mainly in Malaysia and the Asia-Pacific.

The group is mainly involved in manufacturing and selling a range of petrochemical products such as olefins, polymers, fertilisers, methanol, and other basic chemicals and derivative products.

For the financial year ended March 31 (FY10), Petronas Chemicals posted a 25% decline in net profit to RM2.59bil, after the cyclical nature of the industry, economic conditions and higher feedstock costs affected earnings.

With an authorised capital of 15 billion shares and paid-up capital of RM1.5bil, a back-of-the-envelope calculation would mean the company’s earnings per share (EPS) stood at 17 sen for FY10.

The analyst added that the offer price for the share would probably reflect a lower PE multiple of 10 to 11 times.

Petronas’ other listed companies, Petronas Dagangan Bhd, is trading at a PE multiple of 14.41 times while Petronas Gas Bhd is trading at a PE of 20.56 times.

Petronas Chemical Group's IPO is one of two offerings to be launched by government-run Petronas in response to Prime Minister Najib Razak's call to reduce state ownership in the private sector and boost liquidity in the stock market.

That has raised investors concerns that the firm will remain an illiquid stock like many of the government-linked companies that make up more than half of the benchmark FTSE Bursa Malaysia KLCI Index .

IPO: Malaysian Marine and Heavy Engineering (MMHE)

Malaysian Marine & Heavy Engineering Holdings Bhd’s (MMHE) initial public offering (IPO) could potentially raise between RM854.4mil and RM1.12bil, priced is RM3.61 per share.

Its performance driven by 3 core business

(1)engineering and construction services

(2)marine converting

(3) marin repair.

MMHE runs a yard in Pasir Gudang, Johor, one of the largest in the region and the only capable of coverting big ships into vessel that can process and store oil and gas structure.

It could win more jobs. petronas could give it some big project after winnin the right to develop 4 oilfields in Iraq last year.

According to an MIDF Research report, this was based on the industry price/earnings ratio (PER) band of 12 to 15.8 times to MMHE financial year 2010 earnings.

MMHE is a wholly owned subsidiary of shipping giant MISC Bhd. It is a key revenue contributor to its parent company and recorded a net profit of RM284mil on revenue of RM6.15bil in the financial year ended March 31, 2010.

MISC's is likely fall following the listing of MMHE. this becasue MISC will no longer own 100% of MMHE and will no tbe able to equity account MMHE's business into is consolidated group earning. MMHE's oil and gas and heavy engineering business are the jewel in MISC's crown. its financial summmary shows that MMHE contributes over 40% to MISC's net profit in FY2010. MMHE also has an order of more than RM6 billion as at Dec, 31, 2009.

MMHE, which specialises in engineering and construction, marine repairs and conversion, currently has an order-book of more than RM6bil.

MIDF Research expected the IPO to be beneficial to MISC as the funds raised could be used for further expansion such as acquisition of more tankers.

“Although there would be dilution to MISC’s income from MMHE, we expect the impact to be minimal.

“The RM300mil cash dividend from MMHE and the funds raised from the IPO will also reduce MISC’s gearing level from 0.37 to 0.29 times,” it said

Public offering open from now until 14 October 2010 Thursday. You can get IPO form from your dealer representative @ remisier.