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Stocks In Focus MY (BHIC, Guinness Anchor, Mulpha Land) – 14/05/15

BHIC Q1 Earnings Jump Nine Fold

  • Boustead Heavy Industries Corp (BHIC) net profit jumped nine fold to RM8.4 million in 1Q15, driven by higher percentage of completion for the Belum Satellite topsides facilities for the Murphy Sarawak gas development projects.
  • Revenue fell 1.2 percent to RM63.4 million due to lower revenue from defence-related maintenance, repair and overhaul (MRO) of navy vessels and chartering segment despite the higher contribution from the Belum project.
  • BHIC expects the physical construction of the first six ships to begin in the first half of this year with an early 2019 delivery date for the LCS project.

Significance: BHIC believes the heavy engineering segment will spur the group’s performance through MRO activities. BHIC is cautious in expanding its business in the oil and gas sector due to the unsettled environment and the announcement of capital expenditure cuts by oil majors including Petronas.

Guinness Anchor Q3 Earnings Rise

  • Guinness Anchor (GAB) registered a 10.9 percent increase in net profit to RM39.5 million for 3Q15, driven by an increase in revenue and improved cost efficiencies.
  • Revenue rose 17.4 percent to RM437.3 million due to sales during the Chinese New Year sales and pricing in addition to new brand launches in 2014.
  • For 9M15, GAB’s net profit rose 12.5 percent to RM170.2 million while revenue rose 12.8 percent to RM1.4 billion driven by volume growth, pricing and favourable brand mix.

Significance: GAB expects domestic beer business environment to be challenging in near-term due to the implementation of the Goods and Services Tax (GST) as consumers are likely to be cautious in their spending. However, GAB has noticed improved performance during the Chinese New Year and believes that it reflects the growing appeal of its brands and effectiveness of its sales strategy.

Mulpha Land To Raise RM19 Million

  • Mulpha Land is planning to raise about RM18.7 million via a private placement exercise to finance the advances provided for the acquisition of land under joint-venture entity Mayfair Ventures.
  • The private placement was also to repay borrowings. The placement exercise could raise up to RM18.7 million based on the indicative issue price of the placement shares.
  • The company has yet to identify the targeted third-party investor to take up new shares.

Significance: The proposed private placement proceeds involves 10 percent of its issued and paid-up capital totalling about 22.8 million new shares at a price that will be determined later.

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