Stocks In Focus MY (Kossan Rubber, Sona Petroleum, TMC Life Sciences) – 15/01/15
Kossan Rubber Target Price Revised To RM6
Alliance DBS Research notes that construction works on Kossan Rubber Industries’ three new plants have been completed. This will add six billion pieces to its annual capacity. Two of them (Plants 17 and 18) have started operations while Plant 19 is slated to be fully operational by February.
The research institution is confident that the group will be able to maintain the rate of utilisation of these new plants at 82 percent to 85 percent since it has secured buyers for a significant portion of these additional outputs.
The firm is expected to start the construction of its 15-acre development, comprising Plants 20 and 21 in Meru, Klang, in 1Q15 and is targeted to complete it by 2Q16 or 3Q16. The research house has imputed a three-month contribution for these plants based on the combined annual capacity of 3.5 billion gloves they will contribute.
Significance: Alliance DBS Research maintains its ‘Buy’ call on the group with a revised target price of RM5.50, based on 18 times FY15 forecast earnings per share and has revised its FY15 sales volume growth forecast to 30 percent in order to bring it in line with the capacity growth of 31 percent year-on-year.
Sona Petroleum Aborts Salamander Purchase
Sona Petroleum has cancelled its plan to acquire a 40 percent stake in UK-listed Salamader Energy’s Thai unit, Salamander Energy (Bualang Holdings), for RM912 million. As a result, the company will be considering other alternative qualifying assets opportunities.
The company’s cancellation comes before Ophir Energy’s 15 January deadline for registering its takeover of Salamander’s entire share capital. Ophir was reported to have persuaded 28 percent of Salamander’s shareholders to accept its offer at the expense of Sona’s transaction.
Despite the abortion of the deal, the firm continues to be interested in acquiring a stake in the Greater Bualuang area in the Gulf of Thailand because of its knowledge of the asset. Hence it now plans to approach Ophir or Salamander on a revised transaction after their shareholder meetings on 6 February 2015 with new terms reflecting prevailing market conditions and level of oil prices
Significance: The latest development leaves Sona, an oil and gas special purpose acquisition company, still without an asset. If it fails to complete its qualifying acquisition by July 2016, it will be liquidated and the amount held in its trust account will be returned to shareholders.
TMC Life Plans RM300m Expansion For Tropicana Medical Centre
TMC Life Sciences, hopes to spend up to RM300 million to expand the facilities at its flagship Tropicana Medical Centre in Kota Damansara, Petaling Jaya and provide its patients there with improved and more comprehensive service to meet the growing demand of the surrounding community and the Klang Valley.
The first phase of the expansion involves the construction of a new building to house 180 inpatient beds, 128,000 square feet of specialist outpatient clinics, five additional operating theatres, and 170,000 square feet of commercial/retail space. It is expected to commence in the first half of 2016 and will take approximately four years to complete.
The company intends to finance the first phase of the expansion via existing cash and bank balances and surplus of cash from existing operations, which would not impact its gearing. Its cash and bank balances currently stand at RM190.8 million after the conversion of 397.1 million warrants which generated revenue of RM158.9 million.
Significance: For the next phase of the expansion, the company intends to expand on its remaining land in Kota Damansara. It envisions an integrated healthcare campus which will not only serve patients from the Klang Valley but also patients from the whole of Malaysia and the region.
http://www.sharesinv.com/
Kossan Rubber Target Price Revised To RM6
Alliance DBS Research notes that construction works on Kossan Rubber Industries’ three new plants have been completed. This will add six billion pieces to its annual capacity. Two of them (Plants 17 and 18) have started operations while Plant 19 is slated to be fully operational by February.
The research institution is confident that the group will be able to maintain the rate of utilisation of these new plants at 82 percent to 85 percent since it has secured buyers for a significant portion of these additional outputs.
The firm is expected to start the construction of its 15-acre development, comprising Plants 20 and 21 in Meru, Klang, in 1Q15 and is targeted to complete it by 2Q16 or 3Q16. The research house has imputed a three-month contribution for these plants based on the combined annual capacity of 3.5 billion gloves they will contribute.
Significance: Alliance DBS Research maintains its ‘Buy’ call on the group with a revised target price of RM5.50, based on 18 times FY15 forecast earnings per share and has revised its FY15 sales volume growth forecast to 30 percent in order to bring it in line with the capacity growth of 31 percent year-on-year.
Sona Petroleum Aborts Salamander Purchase
Sona Petroleum has cancelled its plan to acquire a 40 percent stake in UK-listed Salamader Energy’s Thai unit, Salamander Energy (Bualang Holdings), for RM912 million. As a result, the company will be considering other alternative qualifying assets opportunities.
The company’s cancellation comes before Ophir Energy’s 15 January deadline for registering its takeover of Salamander’s entire share capital. Ophir was reported to have persuaded 28 percent of Salamander’s shareholders to accept its offer at the expense of Sona’s transaction.
Despite the abortion of the deal, the firm continues to be interested in acquiring a stake in the Greater Bualuang area in the Gulf of Thailand because of its knowledge of the asset. Hence it now plans to approach Ophir or Salamander on a revised transaction after their shareholder meetings on 6 February 2015 with new terms reflecting prevailing market conditions and level of oil prices
Significance: The latest development leaves Sona, an oil and gas special purpose acquisition company, still without an asset. If it fails to complete its qualifying acquisition by July 2016, it will be liquidated and the amount held in its trust account will be returned to shareholders.
TMC Life Plans RM300m Expansion For Tropicana Medical Centre
TMC Life Sciences, hopes to spend up to RM300 million to expand the facilities at its flagship Tropicana Medical Centre in Kota Damansara, Petaling Jaya and provide its patients there with improved and more comprehensive service to meet the growing demand of the surrounding community and the Klang Valley.
The first phase of the expansion involves the construction of a new building to house 180 inpatient beds, 128,000 square feet of specialist outpatient clinics, five additional operating theatres, and 170,000 square feet of commercial/retail space. It is expected to commence in the first half of 2016 and will take approximately four years to complete.
The company intends to finance the first phase of the expansion via existing cash and bank balances and surplus of cash from existing operations, which would not impact its gearing. Its cash and bank balances currently stand at RM190.8 million after the conversion of 397.1 million warrants which generated revenue of RM158.9 million.
Significance: For the next phase of the expansion, the company intends to expand on its remaining land in Kota Damansara. It envisions an integrated healthcare campus which will not only serve patients from the Klang Valley but also patients from the whole of Malaysia and the region.
http://www.sharesinv.com/
