Stockwatch


  • Maruichi: THIS low profile steel pipes maker stole the limelight last week with the announcement of its superbly generous dividend of 250 sen. Maruichi shares touched a high of RM4.26 on Wednesday, its biggest one-day gain in 10 years after what most dealers described as a knee-jerk reaction to the interim dividend announcement. Analysts said Maruichi still remained a cash cow, after the dividend payout of RM316mil or RM2 net per share, given its high net cashflow generating capacity. It also has healthy cash reserves of over RM250mil. Affin-UOB Research has estimated Maruichi's fair value price at RM4.40 per share. 

  • Pernas: ANALYSTS view Pernas' latest re- structuring exercise to streamline the group's hotel operations as a positive move towards reducing its hefty borrowings of RM2.5bil. The exercise slated for completion in the final quarter this year will see Pernas in an improved gearing position, with borrowings reduced to RM2bil. Pernas chief executive officer Mohamed Redza Shah Abdul Wahid was also quoted as saying that the proposed scheme was just “the tip of the iceberg.” He also said that new controlling shareholder Restu Jernih Sdn Bhd was capable of bringing in new assets to enhance the earnings of the hotel group. 

  • Hume Industries: THIS building materials manufacturer is said to be well-cushioned by increasing construction activities in Malaysia. Kim Eng Research is projecting Hume Industries profits to further improve in the final quarter ending June 30 with concrete products to register stronger performance compared to the traditionally low period in the third quarter. Hume Industries has also completed the corporate exercise involving the capital distribution of OYL Industries shares and acquisition of Hume Cem- board Bhd. The research unit foresees further rationalisation of building material businesses be- tween Hume Industries and Hong Leong Industries Bhd

  • Litrak: ANALYSTS believe that the implementation of Touch 'n Go, the government's electronic toll collection (ETC) system, would not have a significant impact on Litrak's bottom line. They said Litrak was likely to register a negative impact of RM1.3mil in pre-tax profit for the financial year 2004. Litrak is the concessionaire for Lebuhraya Damansara Puchong and also has a major stake in the Sprint highway. AmResearch in its notes said Litrak would potentially have to write off investments in its own ETC, Fastrak. For Litrak, the one-off write-off for its investment of RM10mil to date on Fastrak would reduce its FY2004 earnings (per share) by 15% to 12.2 sen. 

  • AMFB: A STOCK worth watching for po- tential gains that may be derived from the prospective proposed merger exercise between its parent AMMB Holdings Bhd and EON Capital Bhd. Although details of the merger plan have yet to be finalised, Kim Eng Research suspects that AMFB would still be privatised. The research unit said this would be effected by the issuance of new shares if the newly merged entity wished to maintain strong investor following. Kim Eng Re- search, which recommends a buy, is targeting AMFB’s price at RM5.00 per share, assuming AMFB is privatised at 1.4 times of financial year 2003 net tangible assets of RM3.56 per share. 

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