Johor Port: OVERSHADOWED though it may be by “big brother” Port of Tanjung Pelepas (PTP), Johor Port is not without its own selling point. While both ports have a common shareholder in Seaport Terminal, PTP is a transhipment container port, and Johor Port, a hinterland port with a strong niche in liquid cargo. Johor Port performed admirably in 2001 and should grow its earnings per share by 22% to 22 sen for 2002. The company's net debt of RM16mil or 16% of shareholders' funds, does not include the advance of RM181mil owed by Seaport Terminal, full payment of which would reverse Johor Port into a net cash position.
UAC: A QUIET but solid achiever, UAC is perceived as a defensive, high-yield stock. The fibre cement and pipes manufacturer was somewhat affected by the foreign manpower shortage last year which affected the construction business, but it has not been too adversely impacted. Profits were still higher on a nine-month basis last year, while sales of fibre cement products have recovered since October. As UAC is one of two big domestic producers, it is well poised to capitalise on the strong demand, limited supply and steadily rising prices of fibre cement products. Demand for building materials has been pushed back rather than reduced permanently.
MBM Resources: BEING the closest proxy to Perodua, MBM Resources will benefit from a maiden full-year contribution from the new Kancil in the current financial year. Also, the possible injection of the Hino franchise – which has a pre-tax profit of RM20mil annually – will provide some excitement in this stock. The company has yet to announce its full year ended Dec 31, 2002, but recent news reports suggested MBM officials are confident of meeting the consensus net profit estimates of RM93mil. Analysts see in MBM huge long-term potential as a regional manufacturing base for Daihatsu, but slower car sales expected in 2003 could weigh down its near-term share price performance.
Crest Petroleum: CREST Petroleum is likely to benefit from the emergence of a new substantial shareholder in Sapura Telecommunications, which bought a 38.5% stake at RM3.60 per share in mid-January. Previously, its share price had been languishing on concerns over its financial health. The company reported a net loss in the third quarter ended Sept 30, 2002. Analysts said Sapura has the resources to a make a general offer for the remaining shares it does not already own, but not without draining its cash pile. Sapura said the acquisition was part of the group's long-term plan to become a fully integrated oil and gas service contractor.
Sime Darby: AT CURRENT valuations of around 12 times price earnings ratio, Sime Darby offers the cheapest alternative big cap play compared with other blue chips in the market. Analysts said the current year's earnings driver would be its plantation division, where earnings are set to double in the current financial year ending June 30, 2003 as crude palm oil prices soared nearly 60% from a year ago. The company had so far announced plans to reorganise its tyre operations and had taken some overseas units private. Analysts believe more can be done as Sime Darby continues to improve efficiency and unlock value for shareholders.
The above comments do not represent a recommendation to buy or sell.