Company Notes 2017.6.23

On earnings calls

The outlook for crude oil prices remains uncertain. The trend of prolonged low levels of capital spending is expected to continue and poses significant challenges to the industry. – Sapura Energy in a filing with Bursa Malaysia


The outlook in the O&G sector remains challenging and uncertain due to protracted oversupply. Overall global economic conditions remain challenging, with higher downside risks. – Yinson in a filing with Bursa Malaysia


On the back of encouraging demand, Superlon is looking to expand its capacity by setting up a new factory in Vietnam (“Factory 4”)…plans to invest approximately USD 4 million for the expansion plans and is targeting for Factory 4 to commence production in the FY2019. The new factory would enable Superlon to strengthen its presence and support its customers in Vietnam and neighbouring countries. – Superlon in a filing with Bursa Malaysia


With the anticipation of more states to ban the use of polystyrene as food packaging in Malaysia in response to the ongoing regulatory ban of non-environment friendly products, the demand for the plastic food trays and other degradable food packaging products is expected to increase in the near future. – SCGM in a filing with Bursa Malaysia


…hopeful with the commissioning of our advanced gasification green energy system at our Kuang plant, will open a new corridor for us to tap on quickly the vast potential of the demand for our green energy generation system in the region. – Comintel in a filing with Bursa Malaysia


In the rubberwood furniture segment, demand for processed materials and components are not expected to grow as furniture manufacturers do not anticipate any significant uptick in export demand. In addition, the industry is increasingly sourcing for cheaper alternative substitutes such as chipboards and also tropical timber-based materials. – SYF Resources in a filing with Bursa Malaysia


Lucenxia, the home dialysis business is still going through regulatory and trial stages in different part of the country and region. This period of regulatory registration was underestimated and took much longer than estimated. – Adventa in a filing with Bursa Malaysia


“…anticipates a good performance this year from the steady earnings of expressway concessions division and the ramping up of works for KVMRT Line 2. The property division’s performance is expected to be stronger in the next few quarters due to the launches of several new projects in Malaysia and overseas.” – Gamuda in a filing with Bursa Malaysia


On corporate development

“Capital expenditure depends largely on the type of feedstock used to generate energy from waste. Going forward, we would like to focus on solving the challenges faced with municipal solid waste.

“Our system powered by thermal decomposition is suitable because it is modular, decentralised and need not be large. It costs about US$5-7 million per megawatt to install, which is dependent on the waste composition and moisture content.” – Comintel ED Loh Hock Chiang


“Manufacturing condoms is quite similar to making rubber gloves and we already have the technology. The profit margin is much higher than glove manufacturing. Our competitive advantage is our market size. We currently have 195 countries in coverage, 3,000 customers, and [use] advanced technology.” – Top Glove chairman Lim Wee Chai


“PRG’s green initiative features three stages — the first being the installation of charging stations in various areas within Sunsuria City.

“The second stage will include installing more EV charging stations at prospective locations within the Klang Valley, and the final stage includes locations beyond the first and second stages, depending on the demand.

“Going forward, we do not discount the possibility to work with highway operators, petrol stations, mall owners, car dealers, national airports and commercial buildings for such initiative.” – PRG MD Alex Wee Cheng Kwan


Superlon targets a payout ratio of at least 30% of its audited consolidated profit after taxation attributable to shareholders for each financial year, after excluding non-operating income that is capital in nature. – Superlon in a filing with Bursa Malaysia


The new stretch film manufacturing facility in Phoenix, Arizona in the U.S. is expected to have a commercial rollout by end of 2017. It forms part of the pivotal and strategic move by the Group to be close to its customers and its sources of raw materials as well as access to other new customers in the region.” – Scientex in a filing with Bursa Malaysia


Assuming that the proceeds from the sale were utilised to pare down borrowings, the annual savings in interest is expected to be approximately RM4.6 million based on an average interest rate of approximately 5.5% per annum. – E&O in a filing with Bursa Malaysia


On regional infrastructure

The outlook of the construction industry remains encouraging as it continues being driven by government-led initiatives and spending, in particular projects such as highways and other public infrastructures. – Advancecon in a prospectus filing with Bursa Malaysia


“Central government funding for infrastructure, an area that we have traditionally viewed as notably inadequate in Indonesia, jumped by over 20% in the latest 2017 budget, and it now stands at 2.5 times what was allocated just three years ago.” – Bina Puri ED Matthew Tee


“We manage to clear the hiccups related to land compensation issues, weather and site conditions, government red tape, regulation changes and so forth…Notwithstanding the increased budget owing to delayed construction, the power plant remains an attractive investment with reasonably good returns.” – Sarawak Cable CEO Aaron Toh Chee Ching


On raw material prices

“This [nearly 30%] surge in waste paper prices is caused by the producers in China. When international prices go up, it will somehow affect the local prices. This year’s pricing is quite volatile compared with the last five to eight years.” Muda deputy MD Lim Chiun Cheong


Management’s comments on future prospect

“The market is very tough as shopping malls in the Klang Valley are mushrooming. Our intention of selling the mall remains the same…if the price is right. Discussions with interested parties are still ongoing…But all of a sudden, many other property companies started coming up with the same product, leading to the excess supply which we see in the market today.” – JAKS Resources senior GM Steven Ang


“This is our bread and butter. We have experience in this [metering] industry, we have our regular customers and the business continues to grow. Last year, we expanded to Nepal, and we are going to India as well. We are exporting to 43 countries currently.” – George Kent chairman Tan Kay Hock


“Even low-cost houses have air conditioners. So, the production cost of air conditioners has come down but demand has increased, especially in markets such as India — it’s huge.” – Alcom MD Heon Chee Syong

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