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Malaysia Daily Bulletin – 20/12/12

TNB To Bid For EC’s Tender For Two Power Plants
Tenaga National (TNB) will be bidding for two coal-fired power plants tendered out by the Energy Commission (EC), which have a combined capacity of 3,000 megawatt (MW). The facility is estimated to cost RM15 billion based on the plant-up cost of US$1.5 million (RM5.6 million) per MW, whilst the actual figure could be slightly higher, according to an analyst. In the meantime, Malakoff Corporation will be TNB’s strongest competitor for the bid, however others could emerge with foreign technical partners to strength their proposition as well. Currently TNB is constructing four power plants in the Northern part of Malaysia which is expected to boost a further 1,632 MW to its capacity. Moving forward, the company plans to invest RM9.7 billion for its capital expenditure in the next five years in order to cope with the domestic power demand. TNB is also looking for overseas opportunities through the joint venture partners.

Significance: TNB’s chief financial officer Fazlur Rahman Zainuddin said the company’s balance sheet remains healthy despite the recent expansion plans. “Our gearing is manageable at 38 percent, which means we have room to gear up. Utilities typically have a gearing of between 55 percent and 60 percent,” he added.

Poh Kong Dips On Bearish 1QFY13 Performance
Poh Kong Holdings’ shares dropped 1 sen or 2.17 percent at midday yesterday after the release of its bearish first quarter FY13 results. The counter floated between 44.5 sen and 46 sen with 1.58 million shares traded. Its net profit for the first quarter ended 31 July 2012 (1QFY13) slumped 33.9 percent to RM11.7 million at the back of RM194.7 million revenue, compared with the corresponding quarter last year where the company registered a net profit of RM17.7 million and a revenue of RM230.6 million. According to the company, the poor results are mainly attributed to the decline in demand of gold products, such as gold bars and wafers. Besides that, the volatility in gold prices also affects the consumer sentiment in the purchase of jewellery products. Poh Kong’s revenue is largely derived from its retail segment, while the manufacturing segment supplies the finished gold jewellery to the retail segment.

Significance: Poh Kong remains cautiously optimistic about the performance of its remaining quarters for FY13. Moving forward, the company will be actively enhancing and differentiating its product offerings in order to attract customers and drive its market share.

Scientex Forecast Combined Revenue Of RM1.25b After Acquiring GW
The acquisition of both GW Plastic and GW Packaging will bring in an estimated combined revenue of RM1.25 billion for Scientex, a significant increase compared to the RM881 million recorded in FY12. Currently, Scientex is still waiting for approval from the relevant regulatory authorities along with GW Plastic’s own shareholders. Its EGM has been scheduled for 3 January 2013. Barring any delays, the acquisition should be completed by mid-January, according to the managing director Lim Peng Jin. Scientex will also be taking over GW Packaging, a company that provides plastic packaging for the food & beverage industry. The decision to venture into the F&B sector was also part of the company’s planning as one of its chemical divisions supplied raw materials to food packaging businesses. The company share prices closed one percent higher at RM3.05 with 52,500 shares done.

Significance: The deal will enhance Scientex’s production capacity up by 20 percent and shift the company’s rank to third in the world among plastic manufacturers.