Globetronics: GLOBETRONICS is expanding its production capacity locally and abroad despite the harsh operating environment in the semiconductor industry. The new investments reflected the management's confidence on its future prospects. The Penang-based chipmaker is investing about RM14mil to set up its second plant in China. It will also start a RM3mil production facility in Kuala Lumpur to serve its multinational clients in the central region. Globetronics chalked up profits even when its peers were suffering from losses during the recent downturn. Its first quarter (ended March 31) net profit rose 31% to RM5.5mil from RM4.2mil a year ago.
TNB: THE utility giant's profit margin may be squeezed by the higher cost of electricity that TNB purchased from independent power producers (IPPs) as more plants come on stream later in the year. IPP purchase costs accounts for 39% of TNB's total operating expenses. Nonetheless, the increase in usage of coal to 31% of its total generation mix from 21% previously helps to trim fuel cost. TNB posted a net profit of RM706mil in the first half of financial year ended Feb 28, down 47% from RM1.3bil in the same period a year ago. The sharp drop was due to a RM313mil foreign exchange loss in the second quarter as a result of a firm Japanese yen.
MISC-F: MALAYSIA International Shipping Corp (MISC) won a bid to buy an entire stake in American Eagle Tankers (AET) from Neptune Orient Lines for US$445mil (RM1.69bil) cash. This is a step forward for MISC to diversify its earnings base in the petroleum-based transportation business. The shipping company is currently a leading player in liquefied natural gas transport business. With the acquisition of AET, MISC's fleet would increase to 37 Aframax tankers and three very large crude carriers (VLCC). Meanwhile, its net debt is also expected to surge by US$1bil as MISC is also taking over AET's borrowings amounting to US$500mil.
Resorts World: THE casino operator staged a strong rebound to RM8.30 last week, up 70 sen or 9% from its low of RM7.60 recorded on April 25. Some investors were convinced that the spread of the Severe Acute Respiratory Syndrome (SARS) virus would be a temporary phenomenon and they believed that the fundamentals of the company remained intact in the long run despite current unfavourable conditions for tourism-related businesses. Resorts World had suffered from intensive selling pressure because the outbreak of the killer virus is expected to inflict a heavy toll on its earnings in both casino and cruise operation.
Malakoff: THE independent power producer (IPP) attracted some buying interest lately. Its share price was on a steady uptrend in recent weeks as investors were seeking shelter in defensive stocks that had clear earnings visibility. The power purchase agreements for Malakoff to sell electricity to Tenaga Nasional Bhd provides a steady income flow for the IPP. Its single digit price-earnings ratio also made it appealing to investors. Malakoff's second quarter (ended Feb 28) net profit jumped 53% to RM118.8mil, boosting its half-year earnings to RM203.9mil compared with RM161.9mil in the previous corresponding period.