Saturday, May 31, 2014

Notice - SKPetro (To Be Excluded From Shariah Compliant List) !!

It was reported that SKPetro will have its Shariah compliant status revoked in Nov 2014 due to its rising non Shariah compliant borrowings.

The latest list of Shariah compliant stocks, with SKPEtro retaining its place in the list despite its non Shariah compliant borrowings rising above the threshold of 33% of total assets.

The next review by the SC would be in Nov 2014.

Althouhg SKPEtro’s conventional debt of rm12.4 billion accounted for 46% of total assets of rm26.6 billion as at Jan 31 2014, its audited FY2014 had not been finalized yet.

The exclusion of the company was only a matter of time as reported as its rm16.5 billion refinancing programme comprised conventional loan facilities, while its acquisition of Newfield International’s assets for rm2.8 billion would be funded by USD based borrowings.

Wednesday, May 28, 2014


It will turned into a full fledged property player in 2015, with Penang based property developer Ideal Property Group set to inject its assets into the company.

The company’s business is currently (May 2014) divided equally between reconditioning heavy equipment and machinery, and property development.

It will be injecting its properties into the company when it does its corporate exercise.

Development projects with a GDV of rm1.5 billion are in the pipeline for IUB, among them a development project in Tanjung Pinang with a GDV of rm500 million and a project in Bayan Lepas with a GDV of rm1 billion.

It will selling off the assets of the existing business to suppliers and contractors to make way for property development business.

Its plans for property development projects outside Penang … in KL.

Datuk Alex Oooi, chairman of IUB is also a director in Ideal Sun City Holdings Bhd.


Ots order book is at an all time high of rm1.2 billion. With that the company is positive on churning out strong earnings growth at least in the next two years from 2014.

Its main line of business is in the construction of infra projects and building works. It aims to secure an additional rm300 million worth of jobs to boost its order book of rm1.5 billion for FY2014.

It derives some 64% of its revenue from its construction division.

The company inked a rm227 million a deal with UEM Sunrise Bhd to build a condominium block in Cyberjaya. The largest outstanding contract in its order book is an rm428 million job involving the MACC building in Putrajaya.

It is currently (May 2014) tendering for rm1.75 billion worth of construction and infra jobs.

Mitrajaya’s property development segment could be another growth engine.

In the next few years from 2014, the potential to realize all these land bank in terms of value would give it a substantial cash flow. In the 2015 to 2016 period, its group revenue should increase significantly.

It is preparing to unlock the value of its over 200 acres of landbank in Bintang, Selangor and Melaka.

It had no plans in terms of acquisition of new land.

It was reported that its land bank was undervalued, which has not been revalued for many years. The value of the company’s 257.65 acres of landbnk is estimated to have almost quadrupled to rm624 million from its book value of rm160 million as at end 2013.

The company has plans to develop high end bungalow units in Pulau Melaka spanning 17.84 acres of reclaimed land.

The estimated land bank value is nearly double that of the company’s market cap of rm337 million based on rm0.855.

Mitrajaya owns 180 acres of freehold land in Bintang that is targeted for a mixed development by early 2016.

Its plan over the next few years from 2014 also includes the development of three blocks of luxury condominiums in Wangsa Maju with a GDV of rm650 million and a mixed development in Puchong Prima with a GDV of rm1 billion.

Besides its operations in Malaysia, it also has a self sufficient property development business in South Africa which has an undeveloped landbank of 152 acres.

Sunday, May 25, 2014

Choosing When To Go by Lee Kuan Yew (In Memory of Cheong Sun Weng)

Choosing When To Go by Lee Kuan Yew

            All the passages below are taken from Lee Kuan Yew’s book, “One man’s View of the World,” published in 2013.

My daily routine is set. I wake up, clear my email, read the newspapers, do my exercises and have lunch. After that, I go to my office at the Istana, clear more papers and write articles or speeches. In the afternoons and evenings, I sometimes have interviews scheduled with journalists, after which I may spend an hour or two with my Chinese teachers.

I have made it a habit to exercise daily. At the age of 89, I can sit up and I do not need a walking stick. When I was in my 30s, I was fond of smoking and drinking beer. I quit smoking because it was causing me to lose my voice at election campaigns. That was before medical research linked smoking to lung and throat cancer, among other things. Oddly enough, I later became hyper-allergic to smoke. The drinking gave me a beer belly and it was showing up in pictures appearing in the press. I began to play more golf to keep fit, but later on turned to running and swimming, which took me less time to achieve the same amount of aerobic exercise. Now, I walk on the treadmill three times a day ---12 minutes in the morning, 15 minutes after lunch and 15 minutes after dinner. Before dinner, I used to swim for 20 to 25 minutes. Without that, I would not be in my present condition physically. It is a discipline.       

I continue to make appointments to meet people. You must meet people, because you must have human contact if you want to broaden your perspective. Besides people in Singapore, I meet those from Malaysia, Indonesia, and, from time to time, China, Europe and the United States. I try not to meet only old friends or political leaders, but people from a variety of fields, such as academics, businessmen, journalists and ordinary people.

I have cut down on my overseas trips significantly, because of the jetlag, especially when travelling to the US. Until 2012, I was still travelling to Japan once a year to speak at the Future of Asia Conference --- now into its 19th year, organised by the Japanese media corporation, Nihon Keizai Shimbun (Nikkei). For a time, I was going to China nearly once a year, although I am reluctant to go to Beijing now because of the pollution. But the leaders are there, so you have to go there to meet them. The JP Morgan International Council, which I am on, did me the honour of holding its 2012 annual meeting in Singapore, so did the Total Advisory Board. Going to France is all right. It is a 12-hour direct flight on an Airbus 380, there and back. But to go to New York is much more tiring --- especially because of the time change, from night into day and day into night. Travelling overseas helps me widen my horizons. I see how other countries are developing. No country or city stays static. I have seen London and Paris change, over and over again.

Being out of government means I am less well-informed of what is going on and the pressures for change. I therefore go by the decisions of the ministers, by and large. I seldom express a contrary opinion --- at least, much less than when I was in government and attended Cabinet meetings, which allowed me to participate fully in the debates.

Occasionally, when I disagree strongly with something, I make my views known to the Prime Minister. There was au instance of this when the government was looking to reintroduce Chinese dialect programmes on free-to-air channels. A suggestion was made: "Mandarin is well-established among the population now. Let us go back to dialects so the old can enjoy dramas:" I objected, pointing out that I had, as prime minister, paid a heavy price getting the dialect programmes suppressed and encouraging people to speak Mandarin. So why backtrack? I had antagonised an entire generation of Chinese, who found their favourite dialect programmes cut off. There was one very good narrator of stories called Lee Dai Sor on Rediffusion, and we just switched off his show. Why should I allow Cantonese or Hokkien to infect the next generation? If you bring it back, you will find portions of the older generation beginning to speak in dialects to their children and grandchildren. It will creep back, slowly but surely.

Every country needs one language that everybody understands. It was a difficult enough task integrating the four language streams the British left us with. The Chinese schools, where the majority of Chinese students were enrolled, were proud of their language, especially with the rise of a new Communist China from 1949. I had to fight on many fronts to make English the language of all schools and the mother tongues the second language. Chinese language chauvinists battled against this policy tooth and nail. The Chinese newspapermen and schools wanted to prop up their student and readership numbers. Because my command of Chinese then was inadequate, Li Vei Chen, my Chinese press secretary at the time, kept the Chinese press, Chinese middle schools as well as Nanyang University and their staff and supporters under tight control to minimise or prevent demonstrations, go-slows and strikes.

Eventually, it was the market value of an education in English that settled the problem. Hence, we have today's Singapore, with English connecting us to the world and attracting the multinational corporations, and the mother tongues as second language keeping us linked to C'hina, India and Indonesia. This was a critical turning point. Had the people chosen the other path, Singapore would be a backwater.

For sentimental reasons and practical reasons of trade and business with China, we need Chinese as a second language. But we certainly do not need the dialects. To undo now what we had spent so much time, energy and political capital achieving --- the removal of' dialects from the mass media---would be very foolish.


Life is better than death. But death comes eventually to everyone. It is something which many in their prime may prefer not to think about. But at 89, I see no point in avoiding the question. What concerns me is: How do I go? Will the end come swiftly, with a stroke in one of the coronary arteries? Or will it be a stroke in the mind that lays me out in bed for months, semi-comatose? Of the two, I prefer the quick one.

Some time back, I had an Advanced Medical Directive (AMD)) done which says that if I have to be fed by a tube, and it is unlikely that I would ever be able to recover and walk about, my doctors are to remove the tube and allow me to make a quick exit. I had it signed by a lawyer friend and a doctor.

If you do not sign one, they do everything possible to prevent the inevitable. I have seen this in so many cases. My brother-in-law on my wife’s side, Yong Nyuk Lin, had a tube. He was at home, and his wife was lying in bed, also in a poor shape. His mind was becoming blank. He is dead now. But they kept him going for a few years. What is the point of that? Quite often, the doctors and relatives of the patient believe they should keep life going. I do not agree. There is an end to everything and I want mine to come as quickly and painlessly as possible, not with me incapacitated, half in coma in bed and with a tube going into my nostrils and down to my stomach. In such cases, one is little more than a body.

I am not given to making sense out of life --- or coming up with some grand narrative on it ---other than to measure it by what you think you want to do in life. As for me, I have done what I had wanted to, to the best of my ability. I am satisfied.

Different societies have different philosophical explanations for life and the hereafter. If you go to America, you will find fervent Christians, especially in the conservative Bible Belt covering much of the country's south. In China, despite decades of Maoist and Marxist indoctrination, ancestral worship and other traditional Buddhist or Taoist-based religious practices are commonplace. In India, belief in reincarnation is widespread.

I wouldn't call myself an atheist. I neither deny nor accept that there is a God. The universe, they say, came out of the Big Bang. But human beings on this earth have developed over the last 20,000 years into thinking beings, and are able to see beyond themselves and think about themselves. Is that a result of Darwinian evolution? Or is it God? I do not know. So I do not laugh at people who believe in God. But I do not necessarily believe in God -- nor deny that there could be one.

I had a very close friend, Hon Sui Sen, who was a devout Roman Catholic. When he was dying, the priest was there next to him. At 68, he was young, but he was also absolutely fearless. As a Roman Catholic, he believed that he would meet his wife in the hereafter. I wish I can meet my wife in the hereafter, but I don't think I will. I just cease to exist just as she has ceased to exist---otherwise the other world would be overpopulated. Is heaven such a large and limitless space that you can keep all the peoples of the world over the thousands of years past? I have a large question mark on that. But Sui Sen believed that and it gave him a certain tranquillity of mind as he went through his last moments with his priest. His wife, who died in November 2012, believed they would meet again.

Those around me who may have tried to proselytise to me no longer do so because they know it is a hopeless case. My wife had a friend she knew from school who was very religious and kept trying to convert her. In the end, she stayed away from her friend, saying: "It is absurd. Every time we meet she wants to convert me into a Christian." She did not believe in the afterlife --- although, admittedly, it is comforting if you believe there is an afterlife even if there is none.

With every passing day I am physically less energetic and less active. If you ask me to go out in the heat of the sun at two o'clock to meet people, shake hands and kiss babies, I will not be able to do it. I could do it 20, 30 years ago, but not anymore. You take life as it comes, with your physical capabilities declining over the years. Sometimes my secretary would see me resting in my office and would ask me whether they should cancel the next meeting. Sometimes, I would say: "No, let's get on with it." I need 15 minutes for a shut-eye, so that my mind can concentrate after that. But if I cannot, I would say: "Yes, put it off: Let me have a nap." You cannot predict what your physical condition will be like. However rigorous and disciplined I am, it will still be a downhill slide.

In the end, my greatest satisfaction in life comes from the fact that I have spent years gathering support, mustering the will to make this place meritocratic, corruption-free and equal for all races --- and that it will endure beyond me, as it has. It was not like that when I took office. The Lim Yew Hock government was already going corrupt. Younger Singaporeans may not be familiar with a man by the name of Mak Pak Shee, a member of that government. He was an Indian Cantonese with a moustache, and he was what you would call a fixer --- somebody who facilitated the fulfilment of favours for a fee.

Singapore, as it stands, is the one corruption-free spot in a region where corruption is endemic. The institutions have been created to keep it that way, with the anti-corruption bureau. People are promoted on the basis of merit, not of race, language or religion. If we uphold these institutions, we will continue to make progress. That is my greatest hope. [295-301]


            An editorial team from The Straits Times comprising Han Fook Kwang, Elgin Toh, Zuraidah Ibrahim, Chua Mui Hoong and Shashi Jayakumar (an administrative Officer on secondment to the Lee Kuan Yew School of Public Policy) asked the questions below.

Q: You have said before that you consider yourself a nominal Buddhist. Would you still describe yourself as such?

A: Yes, I would. I go through the motions and the rituals. I am not a Christian. I am not a Taoist. I do not belong to any special sect.

Q: When you say "rituals”, what do you mean?

A: On set days you've got to give offerings to your ancestors --- food and so on. All that is laid out by the servants. But it will go off after my generation. It is like clearing the graves during Qing Ming. With each passing generation, fewer people go. It is a ritual.

Q: Where do you draw your comfort from, if not from religion?

A: It is the end of any aches and pains and suffering. So I hope the end will come quickly. At 89, I look at the obituary pages and see very few who have outlived me. And I wonder: How have they lived? How have they died? After long illness? Incapacity? When you are 89 you will think about these things. I would advise that if you do not want to be comatose or half-comatose in bed and fed through a tube, do an AND. Do not intervene to save life.

Q: The number of people who do this in Singapore is still very low, for some reason.

A: Well, because they don't want to face up to it.

Q: Are you in favour of  euthanasia, which some countries have legalised?

A: I think under certain conditions where it is not used to get rid of old people and it is a personal decision of a man taken rationally to relieve himself from suffering, I would say yes, like the Dutch. So in my AMD, I am in fact saying: "Let me go."

Q: If a grandchild of yours comes to you and asks you what a good life is, what do you say to him?

A: I have grandchildren in their 20s. They don't ask me what a good life is. They know what it is. There's been a change in the physical world they live in, the people they meet, a change in generations and different objectives to what people do in life.

Q: Are you saying that it is not possible to influence young people these days?

A: No, you can influence the basic attitudes from the day they are born to about 16 or 17. After that --- sometimes earlier --- they have a mind of their own and they are influenced by what they see around them and by their peers.

Q: You spoke about not believing you would meet your wife in the hereafter. Do you not hold out such a hope, even in your quieter moment? Is it not human to do so?

A: No, it goes against logic. Supposing we all have a life after death, where is that place?

Q: Metaphysical, perhaps?

A: So we are ghostly figures? No, I don't think so.

Q: How often do you think of' Mrs Lee?

A: I have an urn with her ashes and I have told my children to put my ashes next to hers in a columbarium, for sentimental purposes.

Q: And hope?

A: Not really. She's gone. All that is left behind are her ashes. I will be gone and all that will be left behind will be ashes. For reasons of sentiment, well, put them together. But to meet in afterlife? Too good to be true. But the Hindus believe in reincarnation, don't they?

Q: It is in the Hindu creed, yes.

A: If you lead a good life, you come out in a better shape in the next world. You lead a bad life, you become a dog or something.

Q: So do the Buddhists.

A: But they are not so sharp in their conceptions of the hereafter.

Q: Is your routine these days very different compared to when you were still in Cabinet?

A: Of course. The pressure is not there.

Q: But you are somebody who has always coped very well with pressure.

A: Well, the pressure of office means a decision has to be made. And when several decisions come at the same time, you've got to look at the questions carefully and decide. Once you have decided, you cannot backtrack. It is a different kind of pressure.

Q: Do you miss having that sort of pressure?

A: No, no. Why should I miss it? I have done my share.

Q: And would you say you miss attending Cabinet meetings, and the opportunity to interact with younger ministers?

A: No, I think the time has come for me to move on. I am 89. Compared to my world and the reference points that I have fixated in my mind, the map of Singapore --- the psychological map of Singapore --- has changed. I used to visit the houusing estates. I used to know people from the residents' committees well. I interacted with them. I had a good feel of the ground. Now I do not have that. I have to go by reports, which is not the same thing. So I have to leave it to the people in charge who do go around.

Q: Do you regret the decision to step out of government shortly after the 2011 general election?

A: No. How can I carry on making decisions when I am losing the energy to make contact with people on the ground? It requires a lot of physical energy. The mental effort does not bother me because I have not had a stroke nor am I going into dementia. But I lack the physical energy. Before this interview, I had a light lunch, did my treadmill routine and then rested for 15 minutes. I did not need that in the past.

Q: So you have no unfinished business that you had wanted to...

A: No, I have done what I had wanted to do. I gave up my duties as prime minister to Gob Chok Tong. I helped him. He passed them on to Lee Hsien Loong. It is a different generation now. So my contributions are less meaningful --- except when they want to go back on dialects.

Q: How is your health, if I may ask?

A: I was recently hospitalised after experiencing what the doctors said was a transient ischaemic attack. But I have since recovered fully and have returned to work. If you take into account the fact that I am in my 90th year... the doctors have told me there is no benchmark for people of that age.

Q: You set the benchmark. So you are reasonably happy with your physical and mental state at the moment?

A: No, you have to accept the gradual decline in your physical abilities. So far the mental capabilities have not declined, which has happened to some of my friends. I am grateful for that. I think it is largely due to inherited genes. But the physical ageing --- you cannot stop it.

Q: Your mental faculties --- could that be due to your mental habits as well? You are someone who has kept himself mentally very occupied and interested in what is happening.

A: Yes, of course. And I keep on learning new words and phrases in Chinese, so that I am forced to. It is like playing mahjong.

Q: Have your dietary habits changed over the years?

A: Well, I no longer eat to my heart's content. I stop before I am full. I also try to eat more vegetables and less protein.

Q: At an interview with The Straits Times when you turned 80, you said one worry you had was the narrowing window that people who are ageing tend to have, and that it gets smaller and smaller, that would be the end of existence. Is that something that you still think about --- keeping that window open?

A: Yes. Otherwise I would be sitting alone. Why should I meet you and talk to you?

Q: Are you afflicted by loneliness sometimes?

A: You have to distinguish between loneliness and solitude. I had a friend who was one of the brightest students in Cambridge. He is dead now. His name was Percy Cradock. He had a wife who was Danish and had diabetes. She had lost two legs. Percy used to say: "I enjoy my solitude." And I said: "Get hold of the computer and go on Google. You can get all the poems that you have read and enjoyed, purple passages from works of literature. You just type in the keywords. It will come out.” And he did.

Q: What newspapers – or Internet sites --- do you read regularly?

A: I read The Straits Times and Lianhe Zaobai.  I used to read Berita Harian also but now I don't. I used to be very good with my Malay but it is not necessary now that most Malays in Singapore speak English. I follow closely on the Internet news on Singapore, the region, China, Japan, Korea, America, India and Europe. The Middle East --- occasionally. Latin America --- almost zero, because it is not relevant to us. Too far away.

Q: What particular Internet sites?

A: Google. I prearrange for news from the various regions to be automatically passed on.

Q: What books or movies have you read or watched recently?

A: I do not watch movies.

Q: And books?

A: Usually I read biographies of interesting people. I am not attracted to novels --- make-believe, or recreations of whatt people think life should be.

Q: Any recent one that you enjoyed particularly?

A: One on Charles de Gaulle. France was lost. He was a nobody. He went to London and said: "I am France." And he went to Algiers and told Alphonse Juin, who had obeyed the Vichy government and was in charge there: "As a Marshal of France, you ought to be ashamed of yourself." That was a pretty bold man. And he walked back to Paris, of course, with the Allied troops having cleared the way for him.

Q: What are your foremost preoccupations these days? What are the things that keep you awake?

A: I think our changing population. With an overall fertility rate of 1.2 --- we have no choice but to take in migrants. It is difficult to get Singaporeans to change their mindsets. The women are educated. They want a different lifestyle, not to be stuck with early marriages and children. They want to travel first, see the world, enjoy life and marry later, by which time they will have trouble having children.

Q: Any hopes for Singapore?

A: Well, the hope is that it will keep a steady course and uphold all these institutions which make it different from the rest of the region. [302-310]

Saturday, May 24, 2014

About AMProp ... On A Sound Financial Footing

In March 2014 it was reported that the disposal of its stake in Kesas Holdings Bhd to Gamuda Bhd for cash of RM280mil may be paid out as dividends.

The sale of Amcorp’s 20% equity in Kesas was approved and expected the exercise to be completed by the middle of April 2014.

The proceeds from the disposal would be used on the repayment of Amcorp’s bank borrowings (RM75mil), committed capital investments (RM104.6mil), future capital investments (RM80mil), working capital (RM20.2mil) and the remainder to defray the expenses for this disposal.

The disposal is in line with the group’s objective to dispose non-core assets. Subsequent to the disposal, Amprop can then devote more of its resources to core businesses, particularly, in property division and renewable energy projects.

It would see a finance cost savings of about RM4mil per year post this corporate exercise.

AMProp however has ready committed capital invesments that will see some funds being used for this purpose including its property development projects in London (RM89.1mil) and its hydroelectric plant projects in Pahang (RM15.5mil).

To recap the business reorganization exercise undertaking by AMProp from Aug 2008 has proved to be fruitful for the group. It is now on a sound financial footing and focused on growing its property investment, engineering and renewable businesses.

It undertook a major overhaul of its businesses then through capital reconstruction, the acquisition of property development and other businesses from its major shareholder AMCorp Group Bhd and the disposal of non core businesses.

The results of the transformation include a healthier balance sheet, sustainable recurring income businesses as well as higher profitability.

The most striking element of AMProp’s transformation story is its investment in prime commercial properties in London. This started in Sept 2009 which acquired two office tower worth 50.5 million pound though its 60% owned subsidiary. In less than two years it disposed the subsidiary realizing a gain of rm74.8 million.

In Aug 2013, it was partnering Singapore listed Hotel Properties Ltd to develop 72 apartments with a GDV of more than 560 million pound on a two acre parcel in central London.

In Malaysia, AMProp decided to rationalize its property development and sold its land in Pulau Indah for rm130 million in 2008 and another tract in Sepang for rm122 million in 2011.

The proceeds from the disposals helped AMProp reduce its short term borrowings for FY2008 to rm34.8 million in FY2013.

Upon disposing of its land in Pulau Indah and Sepang, the group acquired 188 acres of Shah Alam which are being developed into a premium residential development and 737 acres in Sibu in 2009.

These acquisitions were paid for mainly through the issuance of AMProp shares to AMCorp, thus enabling AMProp to acquire the land in Shah Alam and Sibu.

They will keep AMProp busy for five to 10 years from 2013 and help maintain its cash flow, reduce its debt and improve its profitability.

Its net assets per share stood at rm1.35 as at Sept 30 2013.

Friday, May 23, 2014


It reported earnings of rm16.3 million during the period ended March 31 2014, down 38% year on year.

Going forward, its earnings outlook was expected to remain muted for the year due to persistent weak sentiment surrounding print advertising expenditure.

Star was unable to benefit from major sporting events in 2014 which are more TV driven.

While Star is embarking on many initiatives to reduce its reliance on income generated from the print adex, these initiatives are unlikely to contribute meaningfully in the near term.

The ongoing structural shift from traditional pint to online media is not helping either.

Nonetheless, its efforts to rein staff costs should help to maintain profitability amid weak adex

YTL Power - Too Much Of Uncertainties Ahead

YTLP had a strong and stable cash flow, with its large cash piles (RM8.1bil) allowing it to look for more value accretive acquisitions.

However there are many negative factors which include the fact that YTL Communication (YTLC) continued to report loss in the third quarter of financial year 2014 (FY14), with breakeven expected only in FY15.

Concerned over lower regulated return on Wessex Water by OFWAT ( (Water Services Regulation Authority of England and Wales) at 3.85% over the next five year from 2014 regulatory period (FY15 to FY20).

The competitive and high-operating-cost-environment by Seraya Power in Singapore had also caused the division to be a major drag to the whole group, as it continued to experience pressure on both margin and sales volume due to increasing power generation capacity there.

Besides this, Malaysia power generation (Paka and Pasir Gudang) was expected to expire starting September 2015. This would end YTLP’s existing lucrative business segment.

Additionally, YTLP lost its tender for Track 3B 2,000MW coal-fired power plant to 1MDB. The Energy Commission was expected to pursue direct negotiation for another 2,000MW coal-fired power plant under Track 4A and 4B 1,000MW.

YTLP is expected to be one of the contenders.

Thursday, May 22, 2014

Parkson Holdings - Still Too Dependent On China

It is planning to venture into speciality shops for in house brands and online shopping. Not just that it wants to own shopping malls.

The group’s HK listed Parkson retail Group Ltd is spending rm900 million building a mega mall in China. Locally Parkson Holdings Bhd is investing rm800 million to rm900 million in a mall in Malacca and one in Cambodia for USD170 million.

Its in house brands can rake in gross profit margins of 35% to 40% after discount as opposed to 12% to 16% margins gained from some of the third party brands they carry. Parkson intends for its in house brands to contribute 30% of its sales in five years from 2014 and eventually 50%.

To recap, the lackluster interest in its share price is mainly due to the gloomy economic outlook on China when Parkson group generates a large bulk of its revenue. Moreover stiff competition in China was getting stiff.

Parkson Holdings derives 60% of its revenue from its China operations that is housed under its 51.75% owned subsidiary PRG.

Currently (May 2014) there are no near term excitement in China’s economic indicators.

Its Vietnam operation is also affected by the sharp currency devaluation.

Malaysia’s operations accounted for 25.5% of revenue, while Indonesia’s opearations accounted for 4% and Vietnam’s and Myanmar’s accounted for 3.2%.

Parkson Holdings are still very much dependent on China … the rest might grow but the percentage is not big.

Mall ownerships would make Parkson Holdings an asset heavy entity and tap its current (May 2014) cash coffer. With MegaSteel in the picture … it is unclear how this cross holding would affect the group if Parkson were to run a debt position.

The large borrowings in the Lion group raises more concerns as Parkson embarked on expansion plans that needed huge capex, which in turn lessened cash for dividend.

As at Dec 31 2013 Parkson Holdings had rm1.7 billion in net cash after deducting its total borrowings. This is in stark contrast to the other operations of the Lion Group, which are in net position.

Parkson’s move towards mall ownership is a progressive one, taking heed of is current (May 2014) sole self owned KL Festival City Mall which has been performing well.

Some observers pointed that it is a positive move but it needs a certain scale of mall ownership to have an impact. An example is AEON which has taken about 20 years to build up a certain scale. While most of WEON’s revenue still comes from retail, its bottomline is attributed to properties.

About WZatu

It had three proposals that will see the company issue a renounceable rights issue, purchase of a construction and engineering company and entry into the bauxite mining.

The first proposals entails the issue of a renounceable rightsi issue of up to 55 million new ordinary shares of rm0.50 each in WZ Satu at an issue price of rm0.60 per rights share on the basis of one rights share for every two existing WZ Satu shares held.

The second proposal involves the acquisition of KenKeong Sdn Bhd for rm27.5 million which would result in a diversification in the operations of WZ Satu into civil engineering and construction.

The third proposal is the entering into a bauxite mining works agreement by SE Satu Sdn Bhd, a 49% owned company of WZ Satu, with Kreatif Selaras Mining Sdn Bhd for SE Satu to be engaged as a contractor to mine, extract and produce bauxite ore.

Executive Chairman and Chief Executive: Tengku Dato' Uzir Bin Tengku Dato' Ubaidillah serves as the Chief Executive Officer of WZ Satu Berhad. Tengku Dato. Bin Tengku Ubaidillah serves as Chief Operating Officer of Kurnia Setia Bhd. Tengku Dato. Bin Tengku Ubaidillah served as Managing Director of Malaysian General Investment Corporation Berhad. He co-founded Road Builder (M) Holdings Berhad (also called as Road Builder Malaysia Holdings Bhd). He was attached to Jabatan Kerja Raya, Malaysia.

Dato' Ir. Mohd Ghazali Bin Kamaruzaman has been an Executive Director of WZ Satu Berhad since October 24, 2013.

Wednesday, May 21, 2014

Brahims (MAS related company)

Its earnings could see a 22% cut should MAS assume a 30% cut in capacity.

However travelers may opt got other airlines (which could be Brahim’s existing customers), and hence the impact could likely to be much les than 22%.

These could result in Brahim’s FY2014 earnings and FY2015 declining. On a worst case scenario (assuming variable costs constant despite lesser passengers travelled).

In the event MAS ceases operations entirely, MAS/government would need to compensate Brahim’s based on the concession agreement of fair value plus 20% premium.

Based on the rm130 million paid by Brahim’s to purchase additional effective stake of 34.3%, Brahim’s would be paid rm318 million for the termination.

The company’s latest collaboration with the Makkah government to supply food to the pilgrims would potentially result in a significant boost to Brahim’s earnings starting FY2016.

Tuesday, May 20, 2014

Puncak Niaga - substantial shareholder Rozali

Puncak Niaga Holdings Bhd founder and executive chairman Tan Sri Rozali Ismail’s 41.3% stake in the company is valued at about RM484.2mil, based on the net proceeds of RM1.56bil it is set to receive from the Selangor water restructuring exercise.

Estimated Puncak Niaga was set to receive net proceeds of RM1.56bil, which translates to RM3.78 per share.

It is unclear what is Rozali’s plan to move the company forward with the pile of cash it would receive.

Other substantial shareholders of Puncak Niaga are Lembaga Tabung Haji with 5.49%, Oversea and Chinese Banking Corp Ltd (5.05%) and Amanah Saham 2020 (5.04%).

Can-One - A Good Bargain Or Risky Bet !!!

Current (15 May 2014) Can-One market cap shrank to rm435 million.

Can-One a good bargain or a risky bet?

To some quarters, the stock could be a good bargain now (15 May 2014) to pocket rm482 million cash once Kian Joo Can Factory Bhd sells its business to Aspire Insight Sdn Bhd for rm1.46 billion.

Critics however say this could be a risky bet should the deal fall through.

Can-One has a 32.9% stake or 152.4 million shares in Kian Joo. Based on Aspire Insight’s offer price of rm3.30 per share, Can-One’s block of shares in Kian Joo would bring home rm482 million or rm3.16 cash per share which is higher than its current (15 May 2014) market price.

This is also means that investors are getting Can-One’s other core business free at this price. Can-One’s other core businesses are manufacturing of tin cans and plastic jerry cans as well as dairy and non dairy products such as condensed milk.

The rm482 million cash in hand would enable Can-One to pay of its borrowings of rm300 million as at end 2013. The company had taken up rm240 million debts to purchase stake in Kian Joo from the See family. Can-One won the bid for Kian Joo at rm1.65 per share.

The asset would make Can-One a cash rich company. Assuming that Can-One settles rm240 million of borrowing, it would still have a rather big cash pile of rm242 million or rm1.59 per share.

Unfortunately the sale of Kian Joo remains uncertain.

Can-One’s share price may lose more ground if Kian Joo’s proposed divestment fails.

Aspire’s offer for sale has drawn strong opposition from some shareholders including the Datuk Anthony See.

Some parties think the offer price of rm3.30 is too low, it should be as high as rm6 considering Kian Joo has the lion’s share of the domestic aluminium can market. It also owns several parcels of land in the Klang Valley where land prices have appreciated substantially. Also Kian Joo owns a 54.83% stake in Box Pak Bhd.

Datuk See has taken legal action in a bid to prevent Can-One from voting for Kian Joo’s proposed asset sale … largely of the connections between Yeohm Chee and Can-One deemed related party transaction.

If Can-One could not vote at the EGM, and EPF which holds a 10.03% stake in Kian Joo is also to abstain from voting as it is also the offeror.

This will leave holders with about 57% of shareholding to decide on the proposed asset sale. It requires 75% of those non interested shareholders’ supportive vote to pass the resolution.

In this scenario, the See family which is believed to control a 15% stake if not more, in Kian Joo could be a deal breaker.

However the current (May 2014) legal suits by See will not be able to stop Kian Joo’s board from proceeding with the proposal unless he applies for a court injunction to block it.

Monday, May 19, 2014

Hibiscus - Oman & Australia Will Be Its Current Focus ..

It has forecast a gain in NPV of USD65 million from mid 2015 if its 2015 production plan for its West Seahorse Oil Field in Australia goes well. And if the group is also able to discover oil in the adjacent Sea Lion Field, the gain will be more.

NPV is the present value of net cash inflows generated by a project less the initial investment on the project.

It has a 50.1% interest in offshore block VIC/P57 off Australia’s Victoria which it intends to increase to 55.1% soon.

It has two oil production projects to work now (West Seahorse and Oman Well) May 2014 which is expected to generate cash flow for the group.

The signing of the umbrella heads of agreement in mid May 2014 is a big step to get Australia going. It has a well (L31) to drill before mid 2015 and if it successful, the whole economics of West Seahorse will be different.

The HOA give it a clear path to the monetization of L31.

Hibiscus will utilize internal funds to finance the purchase of Britannia rig. The group expects to raise USD50 million from the exercise of Hibiscus-WA which expires in July 2014 and has a 50 sen strike price.

The new oil discovery in Oman is expected to generate cash flow soon but further details could only be disclosed after Hibiscus gets approval from the Oman government.

On March 7 2014 the group announced that the second exploration well in Block 50 by Masirah Oil Ltd, an associate company had achieved a light oil flow rate of up to 3000 barrels a day.

While the excitement now (May 2014) is in Australia and Oamn, Hibiscus also has plans laid out for other regions in which it has interest.

In the Middle East, it has plans to drill one exploration well in offshore Sharjah, the UAE. In Norway, it plans to drill one exploration well by the first quarter of 2015.

And HiRex will seek to secure two to three concessions.

Hibiscus owns a 35% stake in Lime Petroleum Plc in April 2012. Lime has oil and gas concessions in the Middle East and Norway.

HiRex is a JV between Hibiscus and Rex Intl, the license holder of the proprietary RVD Technology.

Tebrau - Has 1000 acres "Landbank" In Johor .

Its two year transition to become a high end property developer player bear fruits driven by its biggest shareholder IWH.

Its maiden launch of its first high end project, Botanika @ Tebrau Coast was sold within hours via balloting.

In line with the boom in the Johor property market, Tebrau’s share price doubled over the past two years from 2012. IWH had acquired a 47.16% stake in the developer in Aug 2012 at rm0.76 per share.

IWH, which is spearheading luxury waterfront developments in Danga Bay is a JV between Tan Sri Lim Kang Hoo and Johor investment vehicle KPRJ with Lim holding a the majority stake.

KPRJ has a 8% direct stake in TTB apart from interests held through IWH.

TTB’s net asset value stood at rm542 million.

TTB has close to 1000 acres in the state that will be transformed into a waterfront development dubbed the Tebrau Coast, akin to the Danga Bay development under its parent IWH.

However 70% of TTB’s Johor landbank is submerged and still needs to be reclaimed. This raises the question of whether TTB can be competitive without its margins being squeezed too much.

The company will start to reclaim some of the submerged areas in Sungai Plentong areas soon and is exploring funding options. With more than rm63 million in debt, and cash balances of rm80 million, it may need to recapitalize and gear up to fund the reclamation.

The reclamation process and building of infra will take a maximum of one year to complete.

The reclamation cost would add to TTB’s total land carrying cost of about rm587 million for 381.92ha or close to 1000 acres translating into rm14.30 psf as at Dec 2012.

Sunday, May 18, 2014


In an interview with the The Wall Street Journal, the prime minister said that bankruptcy might be among several options as a way to restructure the national flag carrier, after years of losses and bitter conflicts with its labour unions.

Acting Transport Minister Datuk Seri Hishammuddin Hussein said that Putrajaya would not rescue MAS following the airline’s dismal performance.

Ahmad Jauhari Yahya, the airline’s CEO, however thinks there is still time to revive MAS without an expensive bailout or a move to seek bankruptcy.

The Journal also warns that the "worse may yet to come" for Malaysia Airlines (MAS) despite the carrier recording a RM443 million loss for the first three months of 2014. The real repercussion due to the disappearance of MH370 could only be felt in the April-June 2014 quarter.

It is worth nothing that MAS’ net gearing was estimated at 195% as at Dec 31 2013 and is expected to leap to 461% in FY2014.

If predicting comes true – that MAS will be in the red until at least 2016 – the airline faces the risk of exhausting its cash pile of rm3 billion based on its cash burn rate of rm1 billion a year.

An announcement on MAS’ reset plan may be made by end May 2014, pending board and shareholder approval, and that the implementation of a scheme was likely to be in July 2014.

Such a plan could involve a court order for creditor protection, possibly bankruptcy, to enable MAS to renegotiate its contracts with suppliers and the terms of employment for staff and crew, as well as a general reduction in its headcount.

MAS could be saved from itself if there was new political will to restructure, and that its forecasts, target price and even recommendation might be raised.

Nonetheless derating catalysts include MAS’ stubborn losses.

Current (May 2014) forecast assumed that industry-average yields would continue to decline in financial year 2014 (FY14) vs FY13, but that a gradual recovery was expected in FY15-FY16, as such low yield levels were unsustainable for the Malaysia-based short-haul airlines.

Friday, May 16, 2014

7-Eleven ... Is It Worth Going For The IPO !!

Name: 7-Eleven Malaysia Holdings Bhd.

Offer Price: rm1.38

Closing Date: 16 May 2014

Listing Date: 30 May 2014

7-Eleven Malaysia’s eight cornerstone investors – Capital Research and Management Genesis, AIA, Matthews International, Macquarie Fund Management, Albizia Capital, York Capital and UOB Asset Management – five are participating as a cornerstone investor in a Malaysia IPO for the first time.

The IPO involves an offering of a total of up to 530.3 million shares of 10 sen each, comprising an offer for sale of up to 348.9 million existing shares and a public issue of 181.4 million new shares.

The retail price is at rm1.38 per issue share.

Rm184.79 million or 73.8% from gross proceeds from the public issue (of rm250.3 million) will be used for capex. Meanwhile 17.1% or rm42.7 million will be utilized for working capital.

The capex allocation which is to be utilized within 3 years is used for the expansion and refurbishment of its convenience stores, construction of its new central distribution centre and upgrade of IT systems.

It plans to continue its store network and will open approximately 600 stores between 2014 and 2016.

After listing, 7-Eleven will be debt free.

Valuations ...

1. At rm1.38, it is priced at 51.1x based on FY2013 EPS of 0.027 sen/share;

2. HL Bank: rm1.38 (Fair Value) based on estimated prospective PER of 20.8x to Dec 2015;

3. TA: rm1.24 (Fair Value) is based on FY2015 EPS of 6.2 sen/share pegging a PER of 20x.

At rm1.38, it is price at a PER of 51.1 times based on its EPS of 2.7 sen after taking into account the adjusted unaudited pro forma consolidated net profit of rm33.3 million for financial year 2013 (FY2013) .

The valuation is also considerably higher than that of its debut in 2010 under its parent company BRetail when its business was valued at an historical PER of 21.7 times on an IPO price of 50 sen per share. It is worth nothing that this time 7-Eleven’s IPO does not include the Singer sewing machine franchise business.

It stated that the retail sector had a re rating, which resulted in a enhancement in the PER of a majority of convenience store operators ranging from 26.1% to 219.7% from the time BRetail was delisted up to Dec 18 2013.

The PER multiple of the FTSE Asian Sector Retail Index had increased by 54.1% from 17.65 times in the same period.

Nevertheless, a better measure would be its forward PER taking into consideration its growth potential. This is especially if the company has plans for expansion and enhancement.

Based on the historical PER, it is expensive especially if benchmark it against the KLCI, which has a long term PER of 15 times.

A good proxy for comparison with 7 Eleven on Bursa is AEON which has a historical PER of 22.8 times.

When compared with Maybank (13x), NESTLE(29x) and SKPetro (24x), 7-Eleven’s valuation looks a little on the high side.

For comparison, Philippine Seven Corp, the operator of 7-Eleven stores in the Philippines has a higher PER multiple of 67.69 times as at Dec 18 2013 than 7-Eleven Malaysia's historical PER multiple of 51.1 times.

Critics however opine that 7 Eleven valuation is not overly expensive as one should look at its growth prospects. Its share price is on the high side, but with 2014’s expected profit, its PER could be 25 times and estimated at 19 times based on next year’s profit.

The company has strength in network, which is at a certain size, so it has economies of scale, and growth will be good. 7-Eleven stores are better than what they were a few years ago, the company bas more networks now (May 2014).

Additionally, other factors to be considered include population growth and the outlook for the retail sector.

7-Eleven has an 82% local market share as at March 2014 with about 1600 stores nationwide.

Its same store sales growth has been declining from 3.4% in 2010 to -0.1% in 2013. This could mean that 7-Eleven would have to rely on new stores for sales growth.

Post listing, BRetail’s shareholding will constitutes 57% of the company’s enlarged share capital.

The rest of the peers while most had an increase in PER multiple, only stood at between 16.80 times and 47.76 times excluding Philippines.

By HL Bank (Fair Value: rm1.38) …

Based on the IPO price of rm1.38, estimated prospective PER of 20.8 times to Dec 2015 is in line with the regional peer average PER of 20.3 times.

Expect it to register a cumulated average annual growth rate (CAGR) of 12.8% between financial years 2013 and 2016. The growth rate would be supported by new store openings and higher commissions from in-store services.

Driven by aggressive store expansion and refurbishment plans, introduction of new products and services, and improvements in product mix, expect 7-Eleven Malaysia to register revenue and earnings per share, CAGR of 12.8% and 24.6%, respectively, from FY13-16F, excluding one-off IPO expenses of RM22.8 million.

7-Eleven Malaysia plans to raise up to RM731.85 million in its IPO, which will be used to fund store expansion and refurbishment, construction of a new combined distribution center and upgrade of IT systems.

The IPO of up to 530.3 million shares represents 43% of its enlarged share capital, comprising 490.8 million shares under the institutional offering and 39.5 million shares under retail offering.

By TA (Fair Value: rm1.24) …

At rm1.38, the valuation is deemed stretched, prompting it to place a lower target price of rm1.24 for the stock. RM1.24 is based on a FY2015 EPS of 6.2 sen/share pegging a PER of 20x.

Versus other retail stocks, the FBM KLCI and peers with regional presence are more superior in terms of market cap, net margins and dividend yields.

It valued 7-Eleven included its dominant 82% market share in the convenience store segment, strong brand name and position as the sole operator of 7-Eleven convenience stores within Malaysia and Brunei until 2033.

Thursday, May 15, 2014


Its catalysts include news flows from the O&G sector and the improvement in Prestariang’s university student numbers which will catalyse a re-rating of Prestariang's share price.

It had entered into a MOU with YPJ Holdings SB, the investment arm of the Johor Education Foundation (JEF) to form a joint venture to establish PAM in Johor. This O&G academy will provide upskilling and training for those aged between 17 and 25 in O&G sector skills like welding, pipefitting and fabrication. Prestariang will own 70% in the JV with JEF holding the remaining 30%.

This was in line with the company’s goal of becoming a regional training and certification player for the O&G sector.

There is a gap to be filled in terms of skilled workers, particularly for the upcoming refinery and petrochemicals integrated development (RAPID) project in Johor.

JEF will help to secure the facilities to conduct the programme and estimates that Prestariang will have to fork out an initial outlay of less than RM1 million for the setting up of the course materials.


In view of the Government’s reluctance to support MAS further and in the aftermath of the MH370 jet disappearance, the possibility of a capacity cutback to mitigate immediate-term cash burn “may be imminent” and was a move which “can only be positive for AirAsia”.

Additionally, this could cause industry yields to stabilise or even increase on a year-on-year (y-o-y) basis during the second half of 2014. If this happens, it could be a powerful trigger to AirAsia’s share price.

There is the potential for a significant yield and earnings upgrade if MAS cuts back on its capacity deployment.

Should the Government decide to pump more money into MAS in 2015 AirAsia’s yields would remain at the current (May 2014) low levels. However, yields in Malaysia were already so low that both airlines had said fares were unlikely to go lower sequentially from where they ended in late 2013 (although fares will likely still be lower y-o-y in first quarter 2014 vs first quarter 2013, as the fare deflation started in earnest only from the second quarter 2013).

Furthermore, AirAsia’s current (14 May 2014) share price is already below its asset liquidation value, and that is not even counting the value of its brand and its sustainable competitive advantage. So, there is significant downside from protection for investors from 14 May 2014 onwards.

A potential negative development that could hurt AirAsia’s yields was the possibility of a hike in KLIA2’s tariffs after May 2015. However, if MAS rationalises its capacity deployment, pricing power might return to the airlines and increase their average yields, allowing AirAsia to pass through the higher passenger service charges.

Wednesday, May 14, 2014

Plenitude - acquired land adjacent to KOMTAR in Penang

It is targeting to achieve rm300 million in GDV sales for FY2013.

It had acquired a 1.1 acre land adjacent to Komtar in Penang in 2012. It plans for prime Georgetown land for Rm33 million.

As at June 2012, its land bank size stood at around 1797 acres while total current and future GDV is estimated to be around rm6.3 billion.

Plenitude is in a net cash position. It has no gearing. Its cash stood at rm392 million and nil borrowings as at June 31 2013. Net asset per share stood at rm3.13 as at June 30 2012.

Meanwhile the winning bidder of bidders for the two Penang hotels put up for sale by the EPF – the Gurney Resort Hotel & Residences and the Northam All Suite Penang – are expected to be announced soon as the selection is believed to be at the final stage.

It is learnt that PJD which also owns and operates hotels, is one party that may have reached this staged in the bidding. PJD’s hospitality arm Swiss Garden Intl Sdn Bhd has in fact been managing both the hotels since Aug 2012.

Another party that has made it to the final stage is Johor based Plenitude Bhd. Plenitude is said to have only placed a bid for the Gurney Resort.

YLI - Unlikely To Benefit From Langat 2 Project !!!

Its major shareholder Tan Sri Syed Mohd Yusof Syed Nasir has sold his entire 30.04% stake in the company to Suasana Karisma Sdn Bhd, a company controlled by some members of the existing management of the pipe manufacturer at RM1.10 per share, valuing the deal at RM32.53mil.

Syed Yusof is better known as the franchise holder of Hard Rock Cafe in Malaysia. His entry into YLI in 2007 had sparked speculation that the pipemaker would be a beneficiary of the construction of the Langat 2 water-treatment plant in Selangor. The project, however, has yet to take off.

Syed Yusof, who was appointed as YLI chairman in August 2007, had emerged as a substantial shareholder in YLI shortly before that with a 30% stake in June 2007. He had acquired the stake from the Loh family at RM2.90 per share, valuing the deal at RM86mil.

Suasana Karisma’s substantial shareholders are YLI’s present managing director Datuk Samsuri Rahmat and executive director Ali Sabri Ahmad. Samsuri, who was formerly YLI’s chief operating officer, was appointed its managing director in June 2008.

He had held various key positions in the public sector for 16 years before joining the private sector in 1996. Prior to joining the company, he was the executive vice-chairman and executive director of TRIplc Bhd.

Ali Sabri, meanwhile, was appointed the company’s executive director in June 2008. He has more than 20 years experience in major construction projects in Malaysia and abroad.

Suasana Karisma’s other listed shareholders are Shairah Begum Kadar Bashah and Fatimah Sulaiman. Suasana Karisma is categorised as a land and property investment holding company with a paid-up capital of RM2 which was registered in January 2013.

Shairah Begum and Fatimah in late 2012 had also emerged in Protasco Bhd with a 27.11% stake via Kingdom Seekers Ventures Sdn Bhd, which is also registered as a land and property outfit.

Tuesday, May 13, 2014


It is set to boost its integrated facility management business when its acquisition of major shareholder UEM Group Bhd’s asset and facility management (AFM) businesses is completed in the second half of 2014.

The proposed acquisition of two of UEM’s cash generating units – PPROPEL and OPUS Group will transform Faber into Malaysia’s largest AFM player.

Propel is in the business of infra maintenance, with its core expertise in highway maintenance. It has also expanded into other sectors of the industry such as airside maintenance, commercial building maintenance and plant shutdown maintenance in the oil and gas industry.

Opus is primarily involved in asset development and management, and consultancy services for road and civil and building related works. It has operations spanning across Malaysia, New Zeland, Australia and UK and Canada.

Faber is in need of new businesses as its current operations (May 2014) are stagnating.

The group is known for its hospital support services provided to government hospitals and healthcare institutions as well as the development of the already matured Taman Desa neighborhood in KL. As its landbank is depleting, Faber had highlighted that its future earnings from HSS could decline as it would hold only a 40% stake in its latest joint venture HSS concessions in Sabah and Sarawak.

The acquisition of 100% equity interest each in Propel and Opus will amount to rm1.15 billion.

As at Dec 31 2013, Faber’s cash pile stood at rm487 million, with virtually zero borrowings.

Since the acquisition will be earnings accretive, Faber’sFY2014 earnings per share could improve.

Till May 2014 it has bagged rm169 million worth of piling contarcts, bringing its order book to rm300 million. One major coup was a rm74 million contract to undertake foundation works for the proposed 118 storey Warisan Melaka tower project in KL.

The group was sitting on a net cash of rm110 million as at Dec 31 2013.

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Please note that all data given are merely blogger's opinion. It is strongly recommended that you do your own analysis and research before investing.