Tuesday, May 12, 2015

'Like' - Matrix (Sri Sendayan Near 3rd HSR Station) !!!

It expects the recurring income from its d’Tempat Country Club and the Matrix Global Schools to contribute up to 10% of its bottom line in the next three to five years from April 2015.

The two properties, which have started operation in 2015 should already be breaking even by 2016.

It expects the company’s property projects in Bandar Sri Sendayan (BSS) here to flourish into a town centre similar to that of 1 Utama upon completion in seven to eight years. The town centre named Sendayan Icon Park is expected to mirror development in 1 Utama.

According to plan, it is worth that 3rd HSR station to be situated within the Labu and Kirby estates in Seremban ... Bandar Sri Sendayan is next to the Labu and Kirby.

The medical facility — which will be built in BSS — will be retained by the company to generate recurring income.

The company also dismissed concerns about the company being unable to maintain its high dividend payout ratio of 40% of its profits, a payout policy it instituted since its initial public offering in 2013.

Matrix Concepts’ approach in diversifying into recurring income assets will set the company apart from its peers amid the cooling property market.

It had proposed to acquire a 5.8-acre land cum approved residential development project in Puchong, Selangor, for RM95 million. Forty per cent of the cost will be settled using internal funds while the remainder will be bank borrowings.

Matrix Concepts’ net cash stood at RM96.94 million on Dec 31, 2014

In FY14, its net profit rose 20% to RM182.61 million from RM151.56 million in FY13.

Vendor IRDK Ventures Sdn Bhd has started preliminary earthworks and piling works for 318 high-rise condominium units and 28 four-storey link villas on the plot of land, which is located beside SetiaWalk.

Matrix Concepts wants to increase the density of the project to up its gross development value to more than RM500 million.

Monday, May 11, 2015

Uncertainties - GentingSP (Falling Rev, Profit and High Bad Debts) !

The developer and operator of the RWS gaming resort in Singapore.

Its flagship RWS will lost VIP volume share to its only rival in Singapore, MBS.

This is on the back of the dismal performance in the 4Q2014 when RWS recorded levels of bad debts in its VIP gambling operations. Genting SP reported a 30% year on year decline in net profit in the three months to Dec 31 2014.

However Genting SP did guide for lower RWS VIP volume as it is extending less credit to improve bad debt management.

RWS had recorded SGD82 million bad debts in 4Q. So it will cede VIP volume share to MBS in 1QFY2015.

China are said to be backbone of the gaming industry in this region. Chinese VIP gamblers account for about half of all Singapore gaming revenue.

Hence casinos in the region have seen a sharp drop in their gaming volume with the economic slowdown in China and the clampdown on corruption by its government. Chinese gamblers as a result have a hard time adjusting to these difficult times resulting in an increase in bad debts experienced by the casinos.

In the case of Genting SP, the problem is compounded when high rollers, or premium players as the company calls them, contribute a large portion of the company’s revenue, where many of them are actually allowed to gamble in its casino using credit that is extended by the company.

And if these premium players incur gambling losses, they are allowed to make good their losses by paying the company at a later date, thus creating numerous account receivables for the company.

Genting SP has more than SGD1.1 billion worth of receivables that were due by Dec 31 2014.

Falling revenue, profit, share price and high bad debts are daunting problems faced by GentingSP.

Tan Sri Lim Kok Thay had assured shareholders that not all bad debts will eventually written off as some of it can still be recovered.

For FY2014 ended 31 the company had provided for USD262 million in bad debts. This amount represents 13.3% of its VIP revenue in the same year.

RWS will also be more stringent when extending credit terms to high rollers.

RWS had secured syndicated senior secured credit facilities of SGD2.27 billion which will be used to refinance Resorts World at Sentosa’s existing facilities of SGD4.18 billion obtained in 2011.

The fund raising is aligned with expansion strategy as it seeks to diversify its portfolio of assets away from the Sentosa integrated resort with a planned 550 room hotel in the Jurong Lake district and additional integrated resort in Jeju in South Korea.

In May 2014 Genting SP set up subsidiaries in Japan. Japan is currently mulling legalizing casino gaming. These projects will require large pool of funds in order for the company to turn its ambitious into reality. If the company is raising capital right now (May 2015), it can only mean the firm’s expansion plans are still very much intact.

It is in net cash position with a total debt to equity of 17.6%. As of Dec 31 2014 it has total borrowings of SGD1.7 billion of which SGD518.7 million is due within a year.

Against these borrowings levels are Genting SP’s cash and cash equivalents of SGD3.69 billion excluding the company’s SGD1.3 billion worth of available for sale financial assets. Moreover Genting SP has been able to generate positive free cash flow amounting to an average SGD1.13 billion per year since 2010. 

Sunday, May 10, 2015

PUC ...Venture Big Into Renewable Energy Biz !!!

It wants to go into the renewable energy business in a big way, after it was selected to be a FIT approval holder by the SEDA.

Its subsidiary received SEDA approval to develop and operate a solar photovoltaic plant with a 1MWp capacity to produce electricity to be supplied to TNB. TNB is finalizing a contract with PUC for a fixed price under feed in tariff rates for the power produced.

PUC hope to increase its energy production to 50MW which includes other types of renewable energy, such as biogas.

It is calling for bids to start commissioning the 1MWp production, and it is required to begin production by end of 2015. Therefore the earnings contribution is expected to start at end 2015.

Funding for its new renewable energy business … it is looking at options that could include bank borrowings, rights issue, private placement and strategic investments.

PUC is now involved in three separate business – media and advertising, IT and renewable energy. Solar energy is the new business which is expected to ensure a stable income stream for the group.

In Aug 2014, a company was set up to venture into e-content, ecommerce and emerchants. The new subsidiary will transform and lead the media and advertising business.

For FY2014 ended Dec 31, its posted a net profit rose seven times to rm9.85 million from rm1.2 million in FY2013 due mainly to consolidation of financial results after the completion of the acquisition of Red Media Asia Ltd and its subsidiaries. Revenue grew 153% to rm53.49 million.

It had completed a reverse acquisition of 100% equity interest in RMA for rm90 million, via the issue of 750 million new shares at rm0.12.

It expects deliver stable earnings results in FY2015 with its plan to reinvigorate its epayment business in 2015.

Monday, May 4, 2015

YongTai ... From Garment Mfg To Property Developer !!!

It is mainly involves in garment manufacturing. It is beginning to see light at the end of the tunnel.

Its textile manufacturing business has been loss making for years.

It ventured into property development in 2014. Its maiden development in Melaka a JV with PTS Properties Sdn Bhd to construct a 29 storey condo hotel with a GDV of rm129 million is fully sold and on track for its opening in June 2015.

For the cumulative six months ended Dec 31 2014 the company registered a net profit of rm745000 compared with a net loss of rm1.2 million in the previous corresponding period due to a profit of rm1.45 million from its property development division. By the end of its financial year ending June 30 2015 al rm8 million in profit from its Melaka JV is expected to be recognized in its books.

The company intends to focus on tourism related properties.

It had inked another JV project with PTS Properties to develop a hotel and serviced apartment known as Apple in Melaka. YongTai expects to reap a profit of rm50 million over the next three years from April 2015 which is set for completion in 2017.

The company is also in talks with several parties for projects in Melaka and KL

It will lookout for land.

Only 40% of its garment business which includes 15 retail outlets selling clothing under hime grown brand such as Effu and Emilio Valentino is profitable.

YongTai is looking to scale down its garment operation.

As at Dec 31 2014 the company had borrowings of rm19.12 million, six times more than its cash. This translates into a net gearing of 0.97 times.

As at Dec 31 2014 Yongtai had amount due to directors totaling rm6 million.

The company had accumulated losses of rm25.25 million.

It had proposed a rights issue with warrants and a private placement to raise rm63.32 million of which rm5 million will be used to pare down its borrowings. The rest will be used in its TheApple development in Melaka and future property projects.

Its largest shareholder is the Liew family’s vehicle, Liew Fat Lin Holdings Sdn Bhd, which has a 20.69% stake.

Saturday, May 2, 2015

JCY ... Not All Doom & Gloom For HDD Industry !!

A proliferation of mobile devices may have led to softer demand for PCs and laptops, but it is not all doom and gloom for the HDD industry.

This is because HDDs are a cheaper alternative to the SSDs that cater for the ever growing need for content storage.

The drop in PCs is made up for by an increase in enterprise hard drives for near line storage. Near line storage is used by corporations, including data warehouses, as an inexpensive, scalable way to store large volume of data.

SSD is a good solution when it comes to accessing emails but SSD is still too costly when it comes to storage. That’s why it had a hybrid drive that only needs 6GB to 10GB for accessing emails and when you want to store something you can ship the information to hard drives.

The usage of PCs and laptops will continue to decline which would result in flat growth in the HDD market in 2015. There might even be a small decline but that decline would be in the PC segment and not in the enterprise market.

JCY which manufactures four main HDD mechanical components, namely base plates, top cover assembly, actuator pivot flex circuit assembly and anti disc, supplies to the largest computer HDD manufacturers in the world include Seagate and Western Digital. It produces about 25% of the world’s HDD base plates and commands 8% to 28% of the global market.

It bounced back from a net loss of rm61.61 million in its financial year ended Sept 30 2013 to register a net profit of rm120 million in FY2014. This was on the back of an increase in volume shipped and an improvement in the average selling price.

It has a dividend policy of distributing at least 50% of its earnings.

Due to the strong USD, it raked in a net profit of rm50.19 million in 1QFY2105 ended Dec 31 up 66% from rm30.25 million a year ago,

It will spend rm200 million to rm300 million on automating its plans over the next five years.

A stronger USD and low crude oil prices will benefit JCY in the near future.

JCY is talking to several parties for potential M&As.

As at Dec 31 2014 the group had cash and bank balances of rm320 million and total short term borrowings of rm111.56 million.

The catalysts in the HDD market include pent up demand from new gaming consoles, increased usage of surveillance cameras and equipment on aircraft that record engine performances.

AS a supplier, JCY would benefit if Hitachi Global Storage Tech and Western Digital merge in China.

Seagate’s rm1.05 billion investment in Penang is a good news for JCY because its plants are mainly in Malaysia.

Going forward, robust cloud storage growth is expected to spur HDD storage demand. Data storage requirements will continue to rise, driven by enterprise HDD storage demand.

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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.