Connectcounty Holdings’ 2Q13 Profit More Than Doubled
Favourable input cost as well as higher efficiency in production were the factors behind the RM0.5 million surge in Connectcounty Holdings’ net profit for the quarter ended 30 June 2013. The bottom line reached RM0.9 million from RM0.4 million in the previous corresponding period. Higher foreign exchange gains and a reversal of impairment of receivables in its Singapore unit further boosted results. For the three months, revenue declined 6.5 percent to RM14.2 million from RM15.2 million in 2Q12. While the company incurred RM0.5 million in losses in 1Q13, the second quarter results saw Connectcounty make a turnaorund for the first six months of financial year 2013. For the first half, revenue grew 3.4 percent to RM27.6 million while earnings stood at RM0.4 million compared to loss of RM1 million in 1H12.
Significance: Connectcounty remains cautious on the outlook for the remaining of the year. It believes that there are opportunities arising from its geographical positioning and technological capabilities, given that emerging markets continue to drive global demand. At the same time, it is proactively mitigating the escalating labour costs in China.
Solid Automotive To Raise RM19.8m In IPO Exercise
Automotive parts trader and distributor Solid Automotive is seeking a listing on the Main Market of Bursa Malaysia in September. Along with it is the issuance of 35.38 million new shares at an offer price of RM0.56 apiece. Upon listing, the firm is expected to have a market capitalisation of RM84 million. The initial public offering (IPO) exercise is expected to raise RM19.8 million. Of the gross proceeds, the Johor-based company earmarked 60 percent or RM12 million for capital expenditure, 27 percent or RM5.3 million for working capital and the balance for listing expenses. Solid Automotive is planning to build a new corporate office and warehouse in Johor Bahru that would cost it around RM22 million; of which RM12 million will come from the proceeds while the remaining from bank loans and internally generated funds. Also in the plans is a new sales office in Kuala Lumpur. Currently, Solid Automotive has seven sales branches throughout Malaysia and one in Singapore. According to the company’s prospectus, it does not have any dividend policy for now but it plans a payout ratio of about 40 percent of its future net profits in each financial year.
Significance: The RM0.56 price tag translates to a price earnings multiple of 8.95 times earnings for Solid Automotive’s financial year ended 30 April 2013. Going forward, the company expects its results to exhibit a healthy growth, bolstered by sustained demand for automotive parts and components in the automotive market.
Tambun Indah Land Records 37.8% Jump In 1H13 Earnings
For the first six months of fiscal year 2013, property developer Tambun Indah Land saw its earnings jump 37.8 percent to RM25.7 million from RM18.7 million in 1H12. The improved performance came on the back of an 11.1 percent rise in revenue, driven by increased contribution from the property development segment as well as construction and project management segment. A 3.6 percentage points improvement in gross margin due to higher selling prices in property development projects, higher other income and a turnaround of its associate company also helped to contribute to the stronger results. As at 30 June 2013, Tambun Indah Land recorded an average take up rate of 73.3 percent on its ongoing projects, with a total gross development value of RM1.32 billion and unbilled sales totalling RM509.7 million. According to the filing with Bursa Malaysia, these should contribute to the company’s earnings for the next two to three years.
Significance: On the improved results, shares of Tambun Indah Land opened today’s session RM0.04 or 2.6 percent higher at RM1.58. Going forward, the group is poised to benefit from the growing vibrancy of the mainland Penang region. The firm is seeing an increase influx of buyers from Penang island, which make up 37 percent of its latest project in Pearl City – Pearl Residence.