Stocks In Focus MY (Guinness Anchor, MMHE, Public Bank) – 06/02/15
GAB, GAB (3255), MHB, MHB (5186), PBBANK, PBBANK (1295)
Brand Strategy And Enforcement Action Benefits Guinness Anchor
Guinness Anchor said its strategy to leverage on its new brands in addition to the measures taken by enforcement officers against contraband products is showing results. The company’s 2Q15 net profit expanded 15.2 percent to RM76.1 million, surpassing the rise in revenue of 4.3 percent to RM520.8 million.
The firm is hoping that the authorities will keep up their vigilant enforcement because it feels that it will lead to an improvement in their results which will benefit their finances. It said that its revival from the hard times it faced in FY14 which has lasted since the first quarter was a result of advantageous pricing and product mix. The firm added that the fact that it grew in both the first and second quarters shows that its improvement in results was not a one-off spike but rather a holistic one.
With regards to the favourable decline in raw material prices, the group said that it has profited from economies of scale due to its practice of hedging at least a year forward according to Heineken’s global procurement standards which it has adopted. It added that its hedging practices also significantly protect it from exposure to the weakened ringgit.
Significance: Going forward, the company feels that its solid fundamentals will allow it to weather the short term uncertainties caused by the goods and services tax which will be implemented in April, and is confident of delivering a laudable performance in FY15.
84% Plunge In MMHE 4Q14 Net Profit
Lower profit contributions from offshore and marine segments have led to an 83.8 percent fall in net profit to RM16.5 million for Malaysia Marine and Heavy Engineering Holdings (MMHE) in 4Q14. The company’s revenue slipped 30 percent from RM726.3 million in the corresponding quarter a year ago to RM508.3 million.
The firm said that its offshore segment recorded lower revenue and operating profits as its ongoing projects in hand are near completion or have sailed away unlike the quarter under review a year ago. Concurrently, although its marine segment’s revenue was higher, as a result of the higher number of tankers and vessels repaired, it registered a relatively lower operating profit as the corresponding quarter the previous year included reversal of provision for completed projects.
The group feels that this year would be a difficult year for the oil and gas industry with oil prices plummeting by half in the last six months. It commented that the leading oil and gas companies are already under pressure and would be slashing their capital and operating expenditures to alleviate the impact. Moving forward, it said its current projects would decide its offshore business performance.
Significance: CIMB Research opines that the plunge in MMHE’s profits is mostly due to delays and provisions for sizeable projects. It has maintained its forecasts noting that the company’s Malikai and SK316 projects will only begin making their substantial contributions in 2H15 and thus kept its ‘Reduce’ call on the stock with target price of RM1.20, citing longer delays as a potential de-rating catalyst.
Record Net Profit For Public Bank
Public Bank’s FY14 net profit jumped 11.2 percent to a record RM4.5 billion, while revenue expanded 10.5 percent to RM16.9 billion. The stellar results were mainly contributed by consistent growth in net interest income, stable credit costs and a 9.2 percent rise non-interest income, attributable to higher income from its unit trust business, investment income and fee income from banking operations.
The group’s net interest income increased by 6.5 percent during the year despite the squeeze on its net interest margin, due to prolonged robust loan and deposit growth, the positive impact of the hike in the overnight policy rate in July 2014 and a rights issue completed in August 2014. It recorded a strong annual loan growth of 10.8 percent which surpassed the banking system’s loan growth of 8.7 percent despite the headwinds it faced.
The firm has also recorded a similar double-digit growth of 10.2 percent in customer deposits with noteworthy contribution from its customer deposits with regard to its domestic commercial banking operations which increased by 11.6 percent, mostly because of the strong growth in its savings, current accounts and fixed deposits. Such growth considerably exceeded the banking system’s deposit growth of 7.6 percent.
Significance: Pursuant to the results, the group has declared a second interim dividend of RM0.31 per share. Moving forward, the bank will continue to focus on its core retail banking and financing business, while expecting to maintain earnings momentum and performance in 2015.
http://www.sharesinv.com/
GAB, GAB (3255), MHB, MHB (5186), PBBANK, PBBANK (1295)
Brand Strategy And Enforcement Action Benefits Guinness Anchor
Guinness Anchor said its strategy to leverage on its new brands in addition to the measures taken by enforcement officers against contraband products is showing results. The company’s 2Q15 net profit expanded 15.2 percent to RM76.1 million, surpassing the rise in revenue of 4.3 percent to RM520.8 million.
The firm is hoping that the authorities will keep up their vigilant enforcement because it feels that it will lead to an improvement in their results which will benefit their finances. It said that its revival from the hard times it faced in FY14 which has lasted since the first quarter was a result of advantageous pricing and product mix. The firm added that the fact that it grew in both the first and second quarters shows that its improvement in results was not a one-off spike but rather a holistic one.
With regards to the favourable decline in raw material prices, the group said that it has profited from economies of scale due to its practice of hedging at least a year forward according to Heineken’s global procurement standards which it has adopted. It added that its hedging practices also significantly protect it from exposure to the weakened ringgit.
Significance: Going forward, the company feels that its solid fundamentals will allow it to weather the short term uncertainties caused by the goods and services tax which will be implemented in April, and is confident of delivering a laudable performance in FY15.
84% Plunge In MMHE 4Q14 Net Profit
Lower profit contributions from offshore and marine segments have led to an 83.8 percent fall in net profit to RM16.5 million for Malaysia Marine and Heavy Engineering Holdings (MMHE) in 4Q14. The company’s revenue slipped 30 percent from RM726.3 million in the corresponding quarter a year ago to RM508.3 million.
The firm said that its offshore segment recorded lower revenue and operating profits as its ongoing projects in hand are near completion or have sailed away unlike the quarter under review a year ago. Concurrently, although its marine segment’s revenue was higher, as a result of the higher number of tankers and vessels repaired, it registered a relatively lower operating profit as the corresponding quarter the previous year included reversal of provision for completed projects.
The group feels that this year would be a difficult year for the oil and gas industry with oil prices plummeting by half in the last six months. It commented that the leading oil and gas companies are already under pressure and would be slashing their capital and operating expenditures to alleviate the impact. Moving forward, it said its current projects would decide its offshore business performance.
Significance: CIMB Research opines that the plunge in MMHE’s profits is mostly due to delays and provisions for sizeable projects. It has maintained its forecasts noting that the company’s Malikai and SK316 projects will only begin making their substantial contributions in 2H15 and thus kept its ‘Reduce’ call on the stock with target price of RM1.20, citing longer delays as a potential de-rating catalyst.
Record Net Profit For Public Bank
Public Bank’s FY14 net profit jumped 11.2 percent to a record RM4.5 billion, while revenue expanded 10.5 percent to RM16.9 billion. The stellar results were mainly contributed by consistent growth in net interest income, stable credit costs and a 9.2 percent rise non-interest income, attributable to higher income from its unit trust business, investment income and fee income from banking operations.
The group’s net interest income increased by 6.5 percent during the year despite the squeeze on its net interest margin, due to prolonged robust loan and deposit growth, the positive impact of the hike in the overnight policy rate in July 2014 and a rights issue completed in August 2014. It recorded a strong annual loan growth of 10.8 percent which surpassed the banking system’s loan growth of 8.7 percent despite the headwinds it faced.
The firm has also recorded a similar double-digit growth of 10.2 percent in customer deposits with noteworthy contribution from its customer deposits with regard to its domestic commercial banking operations which increased by 11.6 percent, mostly because of the strong growth in its savings, current accounts and fixed deposits. Such growth considerably exceeded the banking system’s deposit growth of 7.6 percent.
Significance: Pursuant to the results, the group has declared a second interim dividend of RM0.31 per share. Moving forward, the bank will continue to focus on its core retail banking and financing business, while expecting to maintain earnings momentum and performance in 2015.
http://www.sharesinv.com/
