Friday, August 1, 2014

NEXT For Barakah, Harrisons

Barakah: In 2009, only 10% of Barakah’s revenue came from installation and construction work with the bulk coming from pipeline and commissioning works. The balance of its order book has shifted over the years as the projects grow in size and complexity, with installation and construction works making up 41% of its revenue.
 
As at May 2014, its order book stands at rm2.38 billion with the majority of its projects to be undertaken over the next three to five years from 2014 in installation and construction.

Pipeline and commissioning works are the foundation of what it does. That segment will continue to bring in a small and steady stream of income. It will take on more pipeline and commissioning works as well.

A niche segment under installation and commissioning which it entered into is the design and development of biodiesel tanks. Petronas continues its efforts to revive Malaysia’s carbon footprint, it is taking advantage of the fact it is already licensed in the area and is ready to take up into opportunities.

It had secured a rm29 million job from Petronas Dag for the EPCC of biodiesel storage and blending facilities and its associated accessories.

Its installation and construction segment is ripe for the picking having undergone the transition phase.

In April 2014 it had bagged a rm260 million contract for the RAPID project. The Pengerang pipeline project is also expected to open up new opportunities for Barakah involving both onshore and offshore projects once the trunk line is set.

Its borrowings are relatively small and its capex requirement is low. Its short and long term borrowings amount to rm244 million.

It will need to only replenish capex at rm15 million unless big project comes the way.

Its prospects will be bright if Barakah paired down its debts and a lean balance sheet.


Harrisons: It has the distinction of being one of the oldest and largest sales, marketing, warehousing, distribution and services companies in Malaysia.

The company is now on a growth path as it continues to expand its distribution business while actively seeking for new growth areas.

Its share price has been weighed down by a tax payment issue with the Royal Malaysian Customs Department since Feb 2012. It posted a net loss of rm25.18 million in 1QFY2014 ended March 31 compared with a net gain of rm6.36 million in the same period a year ago, following the payment of rm31.5 million as an amicable settlement between its unit and Customs for alleged unpaid import duty, excise duty and sales tax.

Industry observes points out that competition among trading houses has intensified and margins are narrowing and players are facing the risk of a termination of contracts when consumer spending slows.

The 1Q loss was due to the one off tax payment. Excluding the tax it would have made a pre tax profit of rm8.36 million.

There are only three agency houses listed on Bursa dealing in products from MNCs in Malaysia – Harrisons, DKSH and Yee Lee Corp. Their common denominators are steady financial performance, consistent dividends and a generally stable share price.

Following a settlement of the tax issue, its share price reached a year’s high of rm3.72 on 01 July 2014.

However, its profit margins has been trending down since 2010.

The company had formed a JV with Watts Japan and a potential expansion to other SEA countries.

Distribution is still its core business and dominates 80% of its revenue.

It had established a JV to open Komonoya shops, a chain which sells discount goods from Japan, with Osaka based Watts. Harrisons holds a 30% stake.

Following the tie up with Watts, its focus now is Japanese products.

Major shareholder Bumu Raya Intl Holding Company Ltd holds close to 41% stake in Harrisons Holdings Bhd.

The company has its roots in Indonesia. Previous news reports had linked the company to the Bumi Raya Utama Group as well as ex president Suharto’s daughters including Silti Hediati Haryadi.

Bumi Raya has tried to take the company private in 2008 but failed. So could there be another attempt to take the company private? Harrisons MD Chan said it is always a possibility but this has to depend on the major shareholder.

Chan feels there is room for corporate exercises to improve the liquidity such as bonus issues, new share, finding a solid investor or asset injection!

As at end of FY2013 the company was holding rm111 million in cash.

Wednesday, July 30, 2014

JIT News - Zelan, AEON Credit, Genting Bhd

Zelan: Sources say it is expected to bag a rm250 million contract from ECER for the construction of a drawbridge connecting Muara North and Muara South in Kuala Terengannu. It is partnering an engineering company. They have a 70% and a 30% equity stake in the JV respectively.
 
AEON Credit: Non bank financial institution may consider making a bonus issue which will help to improve the stock’s liquidity.

It focus remains on enhancing its financial products for SMEs especially in the area of commercial vehicle and equipment financing. It will leverage its card member databases.

In 1QFY2015, it raked in rm51.28 million from its SME business, which contributed 1.3% to total financing receivables.

In addition, it is keen to introduce its E-Money card – a cashless shopping solution in Malaysia.

AEON Credit’s capital adequacy ratio stood at 18.9% (above BNM’s 16% minimum requirement) as at May 2014 post issuance of perpetual notes. The programme allows for an issuance of up to rm400 million of which the group has issued rm246 million.

Genting Bhd: Its big investment in Las Vegas may be facing a challenging gaming market with tough competition and possible shrinking interest.

Against such backdrop of a continued US gaming market slowdown, the success of Genting’s proposed Las Vegas casino would largely depend on its positioning among rivals in the city.

The gaming market there is already saturated, but if Genting could pull off a Chinese themed casino there, it would be able to win niche gamblers, especially those from China.

When completed, Genting’s proposed USD4 billion Asian themed resort in the Las Vegas Strip in Paradise would contribute 5% to 10% to the group’s revenue.

Construction of Phase 1 will begin in second half of 2014. The casino will start operating two or three tears later from 2014.

Profit / Loss Calculator

Enter the details and click on the compute button to find out if you are making a profit or a loss.
 Contract Details
  No of Shares Price (RM) Brokerage Rate Desired Profit
Buy
Sell    
 

Contract Type
Share Bought From:
Clearing Fee For:
 Results
 Details Buy  Sell  
 Proceeds 0.00  0.00  
 Brokerage Fee 0.00  0.00  
 Clearing Fee 0.00  0.00  
 Stamp Duty 0.00  0.00  
 Net Amount 0.00  0.00  
 Summary
 Breakeven Price 0.00  
 Buy Net Amount 0.00  
 Sell Net Amount 0.00  
 Profit/Loss 0.00  

Price Range Index
 
Stepping Method:
 Auto Computation (Profit/Loss)
Sell Price  Net Amount  Profit/Loss  
0.00  0.00  0.00  
0.00  0.00  0.00  
0.00  0.00  0.00  
0.00  0.00  0.00  
0.00  0.00  0.00  
0.00  0.00  0.00  
0.00  0.00  0.00  
0.00  0.00  0.00  
0.00  0.00  0.00  
0.00  0.00  0.00  

Popular Posts