Stocks to watch: Sime Darby, Media Prima, MPI, BDRB

KUALA LUMPUR: SIME DARBY BHD will be among the stocks to be in focus on Thursday, Nov 18 after announcing board changes, plans to divest its non-core business and its plan to return to profitability.

Other stocks to watch are MEDIA PRIMA BHD, MALAYSIAN PACIFIC INDUSTRIES and BANDAR RAYA DEVELOPMENTS BHD following their recent corporate results on Tuesday. TIME DOTCOM BHD, whose shares fell sharply on Tuesday after announcing its corporate revamp but included a share capital reduction and share capital consolidation, could see extended selling pressure.

Sentiment would also be cautious despite the late gains on Tuesday, but the broader market displayed rising profit taking. With the settlement date on Thursday after the heavy trading volume last week, punters would have to pay up.

At the regional markets, Shanghai and Hong Kong stocks fell to multi-week lows on Wednesday, Nov 17, on worries about how Beijing will tackle inflation including a rate rise as early as this week. After the market closed, the China cabinet said it will take forceful measures to stabilise prices and it will increase supplies of grain, oil and sugar from the country's reserves.

While Malaysia, Singapore and Jakarta were closed, other Southeast Asian stock markets ended weaker on Wednesday, continuing a losing trend on foreign outflows, worries over euro zone debt, fears of a rise in Chinese interest rates and talk over capital controls. Foreign selling hit Thailand and the Philippines as foreign institutions cashed in profits, although local retail investors were on the buying side.

At Bursa Malaysia, Sime Darby would see trading interest after the conglomerate said it was pursuing legal action in matters pertaining to losses suffered at the group’s energy & utilities division (E&U Division). Other surprises at Tuesday’s AGM were six members of the board who did not seek reelection while one resigned. However, its acting president and group chief executive Datuk Mohd Bakke Salleh said its first quarter results were in the black. The earnings are to be announced on Nov 25.

EMAS KIARA INDUSTRIES BHD, whose share price rallied after proposing to dispose of its geosynthetic manufacturing business for RM100 million, did see some concerns raised by Malaysian Rating Corp (MARC).

MARC said the MARCWatch on Emas Kiara’s RM80 million debt notes reflected the possibility that the transaction may not proceed as expected and the uncertainties that it would generate with respect to the operating profile and earnings generation ability of Emas Kiara following the disposal of its core operating business

Media Prima posted earnings of RM71.87 million for the third quarter ended Sept 30, 2010 compared with net profit of RM17.26 million a year ago. Its revenue was RM416.75 million compared with RM206.35 million a year ago. It declared a dividend of four sen a share.

For the nine-months period, net revenue exceed the RM1 billion mark for the first time and profit after tax and minority interest from continuing operations grew from RM39 million in 3Q FY2009 to RM154 million for the same period in 2010, with strong contributions from all media platforms. Its EBITDA margin, which grew from 20% to 24% due to the increase in revenue and effective cost control measures.

“Excluding the negative goodwill arising from the acquisition of The New Straits Times Berhad (NSTP), and other exceptional items, net revenue grew by 23.3% while PATAMI from continuing operations recorded an increase from RM28.6 million for the third quarter of 2009 to RM63.1 million for the same period in 2010,” it said.

MPI’s 1Q earnings rose to RM25.83 million from RM17.77 million a year ago while revenue rose to RM370.45 million from RM312.32 million. It declared an interim dividend of 10 sen a share. The chip makers said the better performance were due to higher sales in the quarter but this was partially offset by the appreciation of the ringgit against the US dollar.

BDRB swung into the red in the thid quarter with net loss of RM745,000 compared with net profit of RM40.92 million a year ago due to the inclusion of loss in a jointly controlled entity and higher expenses.

Revenue shrunk 52% to RM127.59 million from RM267.47 million as both property and manufacturing divisions reported lower revenues.

BDRB said the property division sold more PROPERTIES with the well-received previews of its new projects: 6 CapSquare in Kuala Lumpur and Straits View Residences in Johor. However, there was little progress income contribution as both these projects were at early stages of CONSTRUCTION [], whilst there were few remaining units of the completed One Menerung project available for sale.

Third-quarter revenue from the manufacturing division under MIECO CHIPBOARD BHD [] (MIECO) was RM42.0 million, 11% lower against RM47.1 million a year ago mainly due to lower export sales of particleboard. The decline in export sales was mitigated by higher domestic demand and more sales of value added products. MIECO recorded pre-tax profit of RM1.6 million in third-quarter 2010, an increase of 45% when compared to RM1.1 million a year ago, which was partly attributable to unrealised foreign exchange gains.

source: theedgemalaysia