Stocks to watch: Sime, Dijaya, UEM Land, Tradewinds

Friday, August 26, 2011

KUALA LUMPUR: The stronger corporate earnings should underpin the market sentiment on Friday, Aug 26 after the sell-off in the afternoon session on Thursday, dragged by banks including CIMB and RHB Capital as funds trimmed their exposure.

Worries about a debt crisis in the US and Europe would impact global economic growth and reduce demand for commodities had battered equities markets.

Despite the cautious markets, including Malaysia, where banks were impacted by worries about a slowing economy also, commodities could be the stocks to watch.

Reuters quoted PLANTATION [] Industries and Commodities Minister Tan Sri Bernard Dompok as saying Maysian commodities such as palm oil, tin and rubber play such a central role in the global economy that their prices are likely to hold up even in a global slowdown.

He was also quoted saying Chinese imports of palm oil are set to rise next month as buyers stock up.

"There will be some impact, but Malaysian commodities are key to this global market. Without rubber the auto industry cannot move, and the same be said with palm oil for the food sector and tin for manufacturing," Dompok told Reuters.

Stocks to watch are SIME DARBY BHD [], DIJAYA CORPORATION BHD [], UEM Land Bhd and Tradewinds (M) Bhd.

Sime Darby Bhd posted a record net profit of RM1.312 billion in the fourth quarter ended June 30, 2011, a stark contrast to the net loss of RM77.35 million a year ago primarily to the sterling results of the plantation, industrial and motors divisions.

Its revenue increased by 42.4% to RM13 billion from RM9.13 billion while earnings per share were 21.84 sen compared with loss per share of 1.29 sen.

Sime Darby proposed a final dividend of 22 sen per share. For the full financial year ended June 30, 2011, its earnings jumped three-fold to RM3.664 billion from RM726.85 million. Its revenue increased by 28.7% to RM41.858 billion from RM32.51 billion.

Dijaya Corp Bhd’s earnings jumped 687% to RM20.75 million in the second quarter ended June 30, 2011 from RM2.63 million a year ago due to net gain of fair value adjustment and better margins for its projects.

The property developer’s revenue rose 1.3% to RM70.66 million from RM69.72 million. Its earnings per share were 4.56 sen versus 0.6 sen.

In the first half, the net profit surged 1,154% or 100 fold to RM38.89 million from only RM3.10 million. Its net profit edged up 0.2% to RM128.34 million from RM128.09 million.

UEM Land's net profit for the second quarter ended June 30, 2011 more than doubled to RM88.93 million from RM40.35 million a year earlier due mainly to an increase in its revenue. Its revenue surged to RM509.40 million from RM88 million in 2010. Earnings per share were 2.17 sen compared to 1.23 in 2010, while net assets per share was RM1.03.

For the six months ended June 30, UEM Land’s net profit surged to RM106.54 million from RM43.49 million in 2010, on the back of a more than five-fold increase in revenue to RM697.09 million.

Tradewinds saw its earnings increase by 42% to RM124.42 million in the second quarter ended June 30, 2011 from RM87.49 million a year ago, boosted by the favourable performances of the rice, plantation and sugar divisions.

Its revenue rose 23.9% to 1.593 billion from RM1.285 billion. Earnings per share were 41.97 sen compared with 29.51 sen. It declared dividend of 20 sen per share from 5.0 sen a year ago.

For the first half, its net profit increased by 30% to RM214.33 million from RM164.75 million.

WAH SEONG CORPORATION BHD [] posted net profit of RM16.19 million in the second quarter ended June 30, 2011, compared with RM1.70 million a year ago boosted by pipeline services, engineering divisions.

It said on Thursday, Aug 25 it revenue rose 9.5% to RM405.16 million from RM369.74 million. Earnings per share were 3.38 sen compared with 0.22 sen. It declared an interim dividend of 3.0 sen..

YTL CORPORATION BHD []’s earnings increased 23.6% to RM1.059 billion (US$355.4 million) in the financial year ended June 30, 2011 from RM856.8 million (US$287.5 million) a year ago.

Its revenue rose 12.5% to RM18.570 billion in FY ended June 2011 compared with RM16.50 billion a year ago.

Maxis Bhd’s net profit rose 3.5% to RM551 million in the second quarter ended June 30, 2011 from RM532 million a year ago, underpinned by its internet and data services segments.

Revenue dipped 1.5% to RM2.158 billion from RM2.191 billion. Earnings per share were 7.30 sen versus 7.1 sen.

Maxis declared a second interim singe-tier tax exempt dividend of 8.0 sen per share amounting to RM600 million to be paid on Sept 30. The entitlement date is Sept 15.

Bumi Armada Bhd’s earnings fell 18% to RM60.26 million in the second quarter ended June 30, 2011 from RM73.65 million a year ago due to higher finance costs and taxation. Revenue rose 40.9% to RM392.96 million from RM278.85 million. Earnings per share were 2.64 sen compared with 3.69 sen.

For the first half, its net profit was marginally higher by 1.4% to RM142.33 million from RM140.30 million a year ago. Its revenue increased by 42% to RM769.12 million from RM541.31 million.

DRB-HICOM BHD []’s net profit for the first quarter ended June 30, 2011 fell 42% to RM91.07 million from RM157.78 million a year earlier on lower share of results of associated companies namely Honda Malaysia Sdn Bhd due to shortages of CKD packs following the Japan earthquake/tsunami in March 2011. Its revenue for the quarter rose 1.93% to RM1.58 billion from RM1.55 billion in 2010. Earnings per share declined to 4.71 sen from 8.16 sen in 2010, while net assets per share was RM2.63.


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