Stocks to watch: AMMB, Tasek, Mudajaya, Hap Seng

KUALA LUMPUR: Investors will have to brace for the flurry of corporate results flowing from Monday, Feb 21 including those from the Genting group, SIME DARBY BHD, AIRASIA BHD, MALAYSIAN AIRLINE SYSTEM BHD (MAS), MALAYAN BANKING BHD and CIMB Group Holdings Bhd.

Other companies due to announce their results include KUALA LUMPUR KEPONG BHD, IJM Corp Bhd and GAMUDA BHD.

Most importantly, investors want to know what is the outlook for the companies, especially those with international operations, in the face of volatile external environment and record high oil prices.

On Friday, Bank Negara announced the Malaysian economy grew at a slower pace of 4.8% in the fourth quarter of 2010 compared with 5.3% in the third quarter due to the weaker growth in external demand which impacted the manufacturing sector.

It said 4Q growth was still underpinned by higher private and public sector spending, but the central bank expects the pace of growth to be affected by moderating external demand. Manufacturing grew at a slower pace due to slower external demand while the agriculture sector registered a decline, mainly due to the decrease in palm oil output.

“The pace of growth of the Malaysian economy will be affected by the environment of moderating external demand. Growth will, nevertheless, be supported by continued firm expansion in domestic demand.

“Private consumption spending will continue to benefit from the favourable labour market conditions, firm commodity prices and access to financing. The roll-out of CONSTRUCTION and infrastructure activities and the implementation of the economic transformation programme by the government are likely to provide significant support to the growth momentum in private investment,” it said.

MIDF Research head Zulkifli Hamzah said the Malaysian market was still reeling from a selldown by foreign investors. Preliminary data from Bursa shows that foreign investors were still net sellers this week.

“Last week, they sold in terms of gross value, RM4.3 billion of Malaysia equity. This week, we estimate a gross outflow of about RM2 billion,” he told theedgemalaysia.com.

“We do not expect the GDP numbers to have a crushing impact on the market when it opens on Monday. Investors are likely to be more apprehensive over the slew of corporate results due to be unveiled next week,” said Zulkifli.

Stocks to watch with fresh corporate developments include AMMB HOLDINGS BHD, Tasek Corp Bhd, MUDAJAYA GROUP BHD and HAP SENG CONSOLIDATED BHD.

AMMB’s net profit for the third quarter ended Dec 31, 2010 rose 21.2% to RM325.31 million from RM268.47 million a year ago. The higher net profit was mainly due impairment writeback on financial investment and doubtful sundry receivables of RM38.3 million and RM2.3 million respectively as compared to impairment loss of RM19.2 million and RM4.0 million for previous corresponding quarter.

Revenue rose to RM1.82 billion from RM1.71 billion in 2009. Earnings per share was 10.83 sen while net assets per share was RM3.31.

For the nine months ended Dec 31, AMMB’s net profit rose 34% to RM1.03 billion from RM766.87 million, on the back of revenue RM5.3 billion, up from RM4.87 billion a year earlier.

Tasek’s earnings in the fourth quarter surged 325% to RM69.1 million from RM16.25 million. The much improved group results apart from the RM43.6 million gain from disposal of PLANTATION and other property, was mainly in line with the increase in group's total revenue compounded by better local cement sales margin.

Tasek said revenue rose 15% to RM133.67 million from RM116.08 million. Earnings per share were 43.3 sen compared with 8.77 sen. It proposed a bumper dividend, comprising of preference dividend of 6%, ordinary dividend 30% and special dividend 50%.

Mudajaya’s net profit for the fourth quarter ended Dec 31, 2010 rose 39% to RM57.09 million from RM41.05 million a year earlier, driven by the increased level of activities. Revenue rose to RM230.29 million from RM211.76 million a year ago. Earnings per share were 13.96 sen while net assets per share rose to RM1.75 from RM1.

Mudajaya proposed a final dividend of 3.0 sen per ordinary share of 20 sen each under the single tier system for FY10.

For the 12 months in 2010, Mudajaya’s net profit surged 75% to RM208.45 million from RM119.18 million a year ago, on the back of revenue RM869.43 million.

Hap Seng Consolidated’s net profit for the fourth quarter ended Dec 31, 2010 surged to RM103.13 million from RM7.69 million a year earlier, driven by improvement in revenue in all divisions except for fertilisers trading which was affected by lower average selling prices.

Revenue rose 19.3% to RM810.88 million from RM679.6 million. Earnings per share were 18.30 sen while net assets per share was RM4.59. For the financial year ended Dec 31, 2010, Hap Seng’s net profit rose 222% to RM323.16 million from RM100.24 million a year ago.

Hap Seng proposed to pay out as final dividend about 50% of its net profit tax and minority interest totalalling RM123.98 million or 22 sen per share.

RAMUNIA HOLDINGS BHD is eyeing some RM300 million worth of fabrication jobs this year as projects up for grabs start pouring into the market again, underpinned by the surge in crude oil prices.

Chief executive officer Nor Badli Munawir Mohamad said on Friday that while Ramunia's existing order book was negligible, he expected it to grow this year after Petroliam Nasional Bhd committed to opening more marginal oilfields and issue more oil and gas contracts this year.