Stocks In Focus MY (IHH Healthcare, Petron M’sia, Sumatec Resources) – 18/03/15
IHH Not Affected By Unsuccessful Radlink-Asia Acquisition
Shares of IHH Healthcare continued to ascend this week as investors stayed unmoved despite the failure of the company’s plans to acquire Singapore’s Radlink-Asia. AmResearch reported that it was maintaining its “numbers” for the firm as it foresaw that strong healthcare demand will continue fuelling the company’s growth and that any financial contributions from the acquisition will be minimal though it would have help consolidate its position in the Singapore radiopharmaceuticals market.
The firm had proposed to acquire Radlink-Asia from Fortis Healthcare Singapore for RM346.5 million last September through IHH’s indirect wholly owned subsidiary, Medi-Rad Associates. However, on 16 March, the Competition Commission of Singapore (CCS) said it was thwarting the deal as the proposed transaction would lead to a significant reduction in competition that would violate Section 54 of the Competition Act.
An analyst noted that investors’ faith in the group could be a result of its announcement on 16 March that it was proposing to acquire five nursing homes in Japan via the injection of RM182.6 million into Godo Kaisha Samurai 10. The group told Bursa Malaysia it had entered into the agreement through its indirect 35.7 percent- owned unit Parkway Life REIT, with the proposed acquisitions targeted to be completed by the end of March.
Significance: RHB Research Institute also believes the rejection by CCS will not have any impact on the company since it has been continually pursuing strategic opportunities to grow its business in its home markets, adding that the rejection by CCS is predicted to benefit it since that will bring about an expansion of its diagnostic and imaging services in its four hospitals in Singapore which will raise the revenue per patient for the Singaporean hospitals and drive patient admission.
Petron Malaysia Expects To Invest RM4b
Petron Malaysia Refining and Marketing, Malaysia’s third largest fuel retailer, is expected to continue to invest heavily – close to RM3.7 billion (US$1 billion) – over the next few years to expand its network and upgrades at its 88,000-barrel-per-day Port Dickson refinery in the highly competitive domestic market.
This follows the recent completion of the rebranding and upgrading of Petron’s wide-ranging retail network of over 550 service stations, formerly Esso and Mobil, which now carry Petron’s distinct red-and-blue colours, improved facilities, premium fuels and innovative services. The rebranding and upgrading programme had been introduced in April 2012 after the firm’s acquisition of ExxonMobil’s downstream business. The firm expects to open more than 20 stations throughout the country in 2015.
The group shared that its rebranded stations will act as a place to introduce the Petron experience by embodying what its brand stands for – innovative products, excellent service, strong partnerships and caring for customers, thus bringing about customer delight and convenience.
Significance: The company said that the earlier-than-planned completion of its re-imaging programme is a major event after its entry into the Malaysian market since that will set the tone for its further expansion there.
Sumatec Buys RM1b Assets In Kazakhstan
Sumatec Resources signed a conditional agreement with Markmore on 28 August 2014, to buy the entire stake in Borneo Energy Oil and Gas, which consists of would-be subsidiary Buzachi Neft, for RM1 billion (US$290 million).
Buzachi holds the subsoil use rights for the exploration and production of hydrocarbons at 26 wells in the Buzachi Neft oilfields in Kazakhstan for a 25-year period up to 1 November 2026. Of the 26 wells, 14 have been abandoned and liquidated, seven are in production and the remaining five are anticipated to commence production in stages this year.
The purchase price was revised in January due to the declining global oil prices and the signature of a supplemental agreement by the company with the vendors to reduce the price by US$ 60million to US$290 million on 9 January. US$210 million will be paid in cash while the remaining will be paid to the vendors through the issuance of 1.2 billion consideration shares at RM0.23 each.
Significance: The company’s proposed RM1 billion acquisition of oilfields and other assets in Kazakhstan “appears fair and reasonable” according to independent adviser FHMH Corporate Advisory since it enables it to strengthen its position in the oil and gas industry while diversifying its revenue stream from the Rakushechnoye oil and gas field. In addition, the proposed acquisition will also provide it a recurring income until the expiry of the subsoil use agreement in 2026.
http://www.sharesinv.com
IHH Not Affected By Unsuccessful Radlink-Asia Acquisition
Shares of IHH Healthcare continued to ascend this week as investors stayed unmoved despite the failure of the company’s plans to acquire Singapore’s Radlink-Asia. AmResearch reported that it was maintaining its “numbers” for the firm as it foresaw that strong healthcare demand will continue fuelling the company’s growth and that any financial contributions from the acquisition will be minimal though it would have help consolidate its position in the Singapore radiopharmaceuticals market.
The firm had proposed to acquire Radlink-Asia from Fortis Healthcare Singapore for RM346.5 million last September through IHH’s indirect wholly owned subsidiary, Medi-Rad Associates. However, on 16 March, the Competition Commission of Singapore (CCS) said it was thwarting the deal as the proposed transaction would lead to a significant reduction in competition that would violate Section 54 of the Competition Act.
An analyst noted that investors’ faith in the group could be a result of its announcement on 16 March that it was proposing to acquire five nursing homes in Japan via the injection of RM182.6 million into Godo Kaisha Samurai 10. The group told Bursa Malaysia it had entered into the agreement through its indirect 35.7 percent- owned unit Parkway Life REIT, with the proposed acquisitions targeted to be completed by the end of March.
Significance: RHB Research Institute also believes the rejection by CCS will not have any impact on the company since it has been continually pursuing strategic opportunities to grow its business in its home markets, adding that the rejection by CCS is predicted to benefit it since that will bring about an expansion of its diagnostic and imaging services in its four hospitals in Singapore which will raise the revenue per patient for the Singaporean hospitals and drive patient admission.
Petron Malaysia Expects To Invest RM4b
Petron Malaysia Refining and Marketing, Malaysia’s third largest fuel retailer, is expected to continue to invest heavily – close to RM3.7 billion (US$1 billion) – over the next few years to expand its network and upgrades at its 88,000-barrel-per-day Port Dickson refinery in the highly competitive domestic market.
This follows the recent completion of the rebranding and upgrading of Petron’s wide-ranging retail network of over 550 service stations, formerly Esso and Mobil, which now carry Petron’s distinct red-and-blue colours, improved facilities, premium fuels and innovative services. The rebranding and upgrading programme had been introduced in April 2012 after the firm’s acquisition of ExxonMobil’s downstream business. The firm expects to open more than 20 stations throughout the country in 2015.
The group shared that its rebranded stations will act as a place to introduce the Petron experience by embodying what its brand stands for – innovative products, excellent service, strong partnerships and caring for customers, thus bringing about customer delight and convenience.
Significance: The company said that the earlier-than-planned completion of its re-imaging programme is a major event after its entry into the Malaysian market since that will set the tone for its further expansion there.
Sumatec Buys RM1b Assets In Kazakhstan
Sumatec Resources signed a conditional agreement with Markmore on 28 August 2014, to buy the entire stake in Borneo Energy Oil and Gas, which consists of would-be subsidiary Buzachi Neft, for RM1 billion (US$290 million).
Buzachi holds the subsoil use rights for the exploration and production of hydrocarbons at 26 wells in the Buzachi Neft oilfields in Kazakhstan for a 25-year period up to 1 November 2026. Of the 26 wells, 14 have been abandoned and liquidated, seven are in production and the remaining five are anticipated to commence production in stages this year.
The purchase price was revised in January due to the declining global oil prices and the signature of a supplemental agreement by the company with the vendors to reduce the price by US$ 60million to US$290 million on 9 January. US$210 million will be paid in cash while the remaining will be paid to the vendors through the issuance of 1.2 billion consideration shares at RM0.23 each.
Significance: The company’s proposed RM1 billion acquisition of oilfields and other assets in Kazakhstan “appears fair and reasonable” according to independent adviser FHMH Corporate Advisory since it enables it to strengthen its position in the oil and gas industry while diversifying its revenue stream from the Rakushechnoye oil and gas field. In addition, the proposed acquisition will also provide it a recurring income until the expiry of the subsoil use agreement in 2026.
http://www.sharesinv.com
