Company Notes 2017.08.11

PIE Industrial Q2 FY2017 Results

With increasing orders from existing customers and on-going new projests with potential customers, the Group foresees a steady grow of revenue in the year 2017, while the drastic fluctuation of Ringgit Malaysia against USD, labour and eletronic components shortage will continue to be the main factors to affect the Group’s future revenue and earning. The Group will continue to strengthen its vertical integration of manufacturing capability and maintain sufficient manufacturing capacity to cater to outsourcing orders from new and existing customers.

Hartalega Q1 FY2018 Results

The significant increase in profit mainly due to increase in sales volume and average selling price, strengthening of USD and improvement in operation efficiency.

The demand for rubber gloves remains in resurgent mood with demand supply dynamics in healthy balance. The nitrile wave continues with 60% of Malaysian rubber glove export denominated by nitrile gloves. Hartalega NGC’s capacity growth is on track to meet the increasing demand for rubber gloves. We have completed commissioning of NGC Phase 1 comprising Plant 1 and 2 in early 2016 and have completed Phase 2 Plant 3 in June 2017. We will begin commissioning of the first production line at Plant 4 in August 2017 and the remaining production lines will be commissioned progressively. Plant 4 is scheduled to complete in 1st quarter of calendar year 2018. The progressive commissioning of Plant 4 is expected to contribute further to Group earnings.

Unisem Q2 FY2017 Results

…improved profit margin arising from higher USD sales achieved coupled with the appreciation of USD/MYR exchange rate.

Tien Wah Press Q2 FY2017 Results

…impacted by the cessation of its Australia’s printing operations announced on 15 June 2017, the Group has recorded a one-off redundancy expenses of RM20.3 million and an impairment loss of machinery of RM11.0 million.

The group continues to review our current footprint, while focusing on the growth opportunities in Indonesia and Dubai.

Hektar REIT Q2 FY2017 Results

Hektar is expected to complete the acquisition of 1Segamat Shopping Centre in September 2017. The Asset Enhancement Initiative (“AEI”) at Landmark Central in Kulim, Kedah is expected to complete by end September 2017. Both exercises are expected to contribute positively to Hektar.

MISC Q2 FY2017 Results

In addition to production cuts, drawdown of crude oil and products inventory continue to dampen demand for petroleum tankers in the immediate term. Freight rates are also being pressured by high fleet growth in 2017.

The LNG shipping market continues to be affected by newbuilds delivery and expiry of older vessel charters, which has depressed spot rates.

Daibochi Plastic and Packaging Q2 FY2017 Results

…saw a double-digit increase in raw material costs compared to the corresponding six months period in the previous year, in line with higher global crude oil prices and a weaker MYR versus the USD. The rise in raw material costs was however mitigated by continued improvement in wastage control, and enhanced operations efficiency following an increase in new foreign worker hires since January 2017.

Daibochi Packaging (Myanmar), which is 60%-owned by the Group, produces consumer flexible packaging for Myanmar’s fast moving consumer goods (FMCG) industry, and is expected to contribute positively to the Group’s performance from the third quarter of 2017 and onwards.

…completed the qualification process with an MNC in Indonesia to supply one of its key F&B brands, and is currently conducting trial production runs.

Boustead Heavy Industries Q2 FY2017 Results

The commercial shipbuilding, looks set to continue to come under pressure from low demand for ships, tonnage overcapacity, tight financing, low oil prices and uncertain economic global outlook. This will continue to put pressure on shipyards which are already reeling from thin order books and cancelled deliveries.

MRCB-Quill REIT Q2 FY2017 Results

The office market in KL is expected to be stagnant for 2017. The accumulative supply of office space in KL City, KL Fringe and Beyond KL increased by 1.46 million sq. ft. to 96.4 million sq. ft. (4Q 2016: 94.97 million sq. ft.) with completion of 5 office buildings. Overall occupancy rates in all areas have dropped, with KL City decreased by 2.3% to 80.8%. Although KL Sentral and Mid Valley City/ Bangsar saw an increase of 1.3% and 0.4% respectively, the overall occupancy rate in the KL Fringe experienced a 0.4% decline to 91.2%. In Beyond KL(Selangor), overall occupancy dropped 1.3% to 78.1%.

The 1Q 2017 average rents in KL City and KL Fringe recorded declines compared to previous quarter at RM6.04 psf and RM5.69 psf, while 1Q 2017 average rents for Beyond KL remained stable at RM4.13 psf. Outlook for the office market in Kuala Lumpur will remained lackluster with continued pressure on both occupancy and rental rates as more new supply is anticipated to enter the market.

The overall occupancy rate of Purpose-Built Retail centres in Penang was relatively stable, which was in the region of 69% to 72% in the past 5 years. Retail malls in the Penang Island continued to outperform those in Seberang Perai, of which the former registered average occupancy rate of about 80% whilst the latter at about 60%. The high occupancy of the island, is attributed to the rather good retail sales mainly from the relatively large working population as well as tourists. Gross rentals for the ground floor of selected prime retail malls in Penang Island commanded higher rental rates compared to those in Seberang Perai, of up to RM22 per sq. ft per month.

Public Bank game changer

…a shareholder who had bought 1,000 Public Bank shares in 1967 (the year it was listed) and held on to them, would be holding 148,938 shares as at end-2016 valued at RM2.94mil. In addition, that shareholder would have received a total gross dividends of RM1.2mil.

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