Singapore Markets closed

Malaysia Daily Bulletin – 25/04/13

Analysts Neutral On Kimlun’s RM64.3m Contract
Kimlun Corporation’s recently secured RM64.3 million contract, received neutral response from analysts. In a filling to Bursa Malaysia, the firm announced that its wholly owned unit Kimlun accepted a letter of award from Keck Seng (M) for the construction of 268 units of houses in Kulaijaya, Johor. According to Kenanga Research, the project is scheduled to be completed by July 2014 and expects the gross margin to hover at approximately 10 percent. Furthermore, it believes the contract should make up part of Kimlun’s order book replenishment assumption of RM500 million for financial year 2013. “Assuming a net margin of seven percent, the whole project will contribute about RM4.5 million in total to Kimlun’s bottom line for financial year 2013 and 2014,” said the research house in a note. On the other hand, Alliance Research remains positive on Kimlun as a direct proxy for increasing developments at Iskandar Malaysia. It expects Kimlun’s forte in the industrialised building system has also an added advantage in bidding for building type jobs from developers.

Significance: Kenanga Research expects Kimlun to continue to secure more building projects in the Klang Valley and Johor, given its competitive edge in building projects, which require 70 percent pre-cast components. It has maintained an “Outperform” rating on Kimlun with a target price of RM1.77, while Alliance has stuck to a “Buy” call with an unchanged target price of RM2.07.

REDtone International Achieves Significant Growth In Net Profit
REDtone International’s net profit surged 800 percent to RM3.92 million in the third quarter ended 28 February 2013 from only RM427,000 a year ago, mainly due to the increase in data revenue and the divestment of non-core and loss making businesses within the group. REDtone’s revenue during the same period was RM40.48 million, or 71.67 percent higher than the RM23.58 million, previously. Moving forward, REDtone said it expects to maintain its growth momentum. “Following the upcoming launch of REDtone Fibre Plus that rides on Telekom Malaysia’s high speed broadband network, and 4G services with Maxis, the group will have a complete range of service offerings covering corporate Internet, virtual private network, data centre and disaster recovery centres and applications among others, by integrating all available networks and technologies to provide the best of data and broadband solutions to the corporate, SME/SMI and the government,” said the company.

Significance: REDtone said the group’s repositioning from primarily a voice business to data and broadband has again shown positive results in the third quarter. After recording losses for the past four years, the group returned to profitability since the fourth quarter of 2012.

DiGi Mulls Business Trust, Pays 90 Percent Of Net Profit As Dividend
DiGi.Com which recorded a net profit of RM328.6 million for the first quarter ended 31 March, has confirmed it is currently working on setting up a business trust. “We are working on it (business trust) now and it has not been concluded yet. It is a new framework and it will be the first business trust in Malaysia, so we are evaluating it,” DiGi chief executive officer Henrik Clausen stated yesterday. The Telecom company’s revenue in the first quarter ended 31 March rose 4.9 percent to RM1.64 billion from a year ago, driven by increased data usage, from a larger mobile Internet subscriber base of 5.8 million and higher sales of smart devices. Its earnings per share climbed 2.7 percent to 4.23 sen over the year. DiGi has also declared its first interim dividend of 3.8 sen, or RM295 million, which translates into a 90 percent payout ratio.

Significance: DiGi is currently modernising its network and expanding capacity to capture a bigger share of data revenues and grow its business in the long term. The Telco had modernised 68 percent of its network and expanded 3G coverage to 68 percent of the population from 56 percent last year.

More From Shares Investment: