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Stocks In Focus MY (Fraser and Neave, Hartalega, Tune Ins) – 06/05/15

Frase And Neave Earns RM70 Million For Q2

  • Fraser and Neave (FNH) earnings increased 3.5 percent to RM70.5 million in 2Q15.
  • Despite effective Chinese New Year trade and promotion activation, there was lower sales revenue and volume for all products because of the heavy pre-Goods and Service Tax (GST) destocking by both its distributors and retailers.
  • There were spill-over effects from the flood in the east coast states of Peninsular Malaysia with the prolonged delay in commencement of businesses post-flood.

Significance: With the improved gross margin stemming from a favourable sales mix, higher factory utilisation and manufacturing efficiencies, operating profit margins has improved significantly from 6.9 percent to 9.6 percent.

Hartalega Earns RM55 Million For Q4

  • Hartalega Holdings‘ earnings increased 11.7 percent to RM54.9 million in 4Q15, driven by higher sales and an adjustment of tax rates.
  • Its revenue increased 8.8 percent to RM305.1 million as its next generation integrated glove manufacturing complex (NGC) started operations in December 2014.
  • For the full year ended 31 March 2015, its earnings dropped to RM209.7 million while revenue increased to RM1.1 billion.

Significance: The company believes that they are a resilient group with a pole position in the nitrile glove manufacturing segment despite the challenging environment. Global demand for nitrile gloves remains strong, boding well for the company.

Tune Ins Buys Majority Stake In PT Asuransi

  • Tune Ins Holdings is acquiring a majority stake in Indonesian insurer PT Asuransi Staco Mandiri (ASM) for approximately RM22.8 million to own 50 percent plus one share equity interest in ASM. The exercise is to be completed in three months.
  • Having a foothold in Indonesia fits well with the group’s strategy to be a leading digital insurer in Asean.
  • Tune Ins has also entered into a cooperation agreement with PT Cahaya Putratama Abadi (CPA), where CPA is to assist Tune Ins in becoming the holding company of ASM and facilitate the acquisition process of ASM.

Significance: The investment in ASM enables Tune Ins to have a controlling interest in a local general insurer in Indonesia where Tune Ins can directly underwrite its online insurance businesses and offer products through other channels in the fast-growing and sizeable markets in Indonesia.

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