Sunday, January 1, 2012

#Stocks to watch:* MAS, Boustead, Cypark, SMR, VS Industry

KUALA LUMPUR (Jan 1): The local stock market could see some profit taking in the first week of the trading year day after the recent run-up and last-minute window dressing activities. The rally was underpinned by local funds and pushed the FBM KLCI into positive territory for 2011.

The 30-stock index rallied more than 45 points over a seven-day trading period to end 2011 at 1,530.7. Total market capitalisation increased by RM11.38 billion over the same period to end the trading year at RM1,284.55 billion.

Among the stocks which could see trading interest following corporate developments include MALAYSIAN AIRLINE SYSTEM BHD [] (MAS), Boustead Holding Bhd, environmental TECHNOLOGY [] and engineering specialist CypARK RESOURCES BHD [], SMR TECHNOLOGIES BHD [], VS Industry Bhd and SILVER BIRD GROUP BHD [].

Last Friday, MAS unveiled its new management structure which included several new business units, the entry of two senior aviation experts and the departure of several top officials.

Focus would be on MAS' long-haul business, with its group chief executive officer Ahmad Jauhari Yahya taking on the role as CEO of long-haul. His deputy, Mohammed Rashdan, who is CEO of short-haul, would head the short-haul, group finance, aircraft finance & management, and in the interim helm commercial.

BOUSTEAD HOLDINGS BHD []'s 51% owned MHS Aviation Bhd is acquiring 16 aircraft for RM586.20 million from DRIR Equities Sdn Bhd. DRIR owns the other 49% of MHS.

Cypark's earnings fell 21.5% to RM4.11 million in the fourth quarter ended Oct 31, 2011 from RM5.24 million a year ago due to lower profit margins than the previous quarter. Gross profit margin was 25%, a decline from the 36% a year ago when it benefited from design income fee and good material rate negotiated in the quarter.

SMR's unit SMR HR Group Sdn Bhd has secured a RM14 million contract from the Human Resources Ministry. The one-year contract is to implement a trainining programme known as Accelerated Skills Enhancement Training Programme (ASET).


VS Industry Bhd's earnings fell 10.9% to RM11.59 million in the firstquarter ended Oct 31, 2011 from RM13.01 million a year ago due to stiffer competition and losses from its China associate. Its revenue increased 14.1% to RM282.43 million from RM247.39 million while earnings per share were 6.39 sen compared with 7.27 sen.

Silver Bird called off its proposed placement exercise and a subscription commitment of up to RM100 million with GEM Global Yield Fund. It had to abort the proposals as Bursa Malaysia Securities Bhd rejected its waiver from complying with all the requirements to undertake back-to-back placements.

Malaysian Rating Corp Bhd (MARC) lowered its rating on MNRB Holdings Bhd's (MNRB) RM200 million Islamic medium term notes (IMTNs) to A+IS from AA-IS after the reinsurer suffered two consecutive years of losses and thin cash flow coverage measures.

The ratings agency said while the outlook for the debt notes was stable, the downgrading reflected weakened holding company level financial metrics after losses for FY ended March 31, 2010 (FY2010) and FY2011.

JAKS Resources Bhd posted net losses of RM25.13 million in the fourth quarter ended Oct 31, 2011 from a net profit of RM1.19 million a year ago due to goodwill impairment adjustment of RM25.90 million.

Its revenue rose 9% to RM93.24 million from RM85.74 million mainly due to higher revenue recognition of works done for projects in the CONSTRUCTION [] division. Loss per share was 5.73 sen compared with earnings per share of 0.27 sen.

For the financial year ended Oct 31, 2011, it swung into net losses of RM22.89 million compared net profit of RM2.28 million in the previous financial year.




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