Good morning,
1) Adventa FY10/11 Rev+26% RM429.9m, Net-88% RM4.2m, EPS 2.75s
Sales in-line, core earnings RM13.4m, 25% below cons RM17.8m.
For Q4 yoy, Revenue +20%, from higher shipments & better prices. There was an exceptional loss of RM9.2m in the current quarter (loss due to fire at one of it's plant RM6.73m & a loan deposit written off RM2.5m) which resulted in the quarter registering it's 1st quarterly loss of RM3.66m. PBT was RM5.57m before the exceptional loss, +43% when compared to corresponding period last year. Qoq, Rev+12%, while Loss before tax stood at RM3.6m vs PBT of RM3m in preceding quarter. PBT would have been +55% if not for the exceptional loss of RM9.2m. Ahead, the erratic dynamism of commodities & currencies create a difficult environment for management of costs & sales prices. The global slowing economic environment, particularly the Eurozone market is a concern. The stretched credit terms for these countries may cause the group's trade funding to increase. However, lower latex cost, the emerging threat of bird flu & higher US dollar will provide support for glove makers going into 2012- HOLD.
2) Boustead: Boustead Holding's 51% subsidiary MHS Aviation Bhd (MHS) is buying 16 aircrafts for RM586.2m from DRIR Management SB & DRIR Rotor SB. DRIR Management & DRIR Rotor are wholly owned subsidiaries of DRIR Equities SB, which owns the balance of 49% in MHS. MHS provides air transport & technical services to O&G companies. In addition to owning it's own aircrafts, it also leases aircrafts from DRIR Management & DRIR Rotor. Boustead said the price was based on "willing buyer willing seller" basis after considering a valuation report from Lloyd Helicopter Asia Pte Ltd. MHS would pay RM530.7m cash in the deal. The remaining RM55.5m was deemed paid, as it was part settlement of debts owed by DRIR Management & Rotor to MHS. Boustead has also proposed to provide MHS a loan of up to RM460m, of which RM422.1m will be to partly finance the acquisition & remaining RM37.9m as working capital; Neutral. The acquisition is part of Boustead's strategy to make MHS an aviation service provider which has a wide range of aircrafts, that will support MHS's plan to actively source for new contracts.
3) TM: Telekom Malaysia Bhd plans to spend up to RM3b in capex this year as it continues to roll out high speed broadband (HSBB) access to more areas and expand it's internet access beyond homes & offices via WiFi hotspots, group CEO said in an interview. Previously, TM's focus has been on providing access via fixed lines to homes & offices. TM is looking to invest RM2.7b to RM3b in capex this year to provide access, build it's core network & support systems, he added. As at Q3 2011, TM had invested RM1.4b but CEO would not say what the final figure was for the full year capex for 2011. TM's capex is normally internally funded. Group now has 200,000 Unifi subscribers & about 17,000 hotspots in the country. The key places where users are most likely to be needing WiFi are in the shopping malls and universities, more so since all smart devices are WiFi enabled - Neutral.
4) Mkt: broad market especially mid & small caps to rally while big cap index stocks to pull back after their year-end window dressing.
