Capital markets news summary for Fri 17 Mar 2023

Capital markets news summary for Fri 17 Mar 2023

Microlink wins RM18m contract to maintain government home loan management system

The company has secured the 5-year contract with the Public Sector Home Financing Board (LPPSA) for the provision of maintenance and support services. The contract – valued at RM17.79m – is subject to a formal agreement. The company was founded in 1994 and transferred its listing status from the ACE Market to the Main Market in Feb 2023. It is an ICT systems integrator which focusses on the financial services, telecommunications and public sectors. For 3QFY2023 ended 31 Dec, the company posted net profit of RM7.51m, up 1.9% from RM7.37m year-on-year. Revenue was up 20% from RM61.04m to RM73.17m contributed by higher order fulfilment and progress billings, in particular for business and technical services for financial institutions. For 9MFY2023 ended 31 Dec, net profit increased by 2.3% from RM21.02m to RM21.5m whereas revenue climbed 10% from RM165.96m to RM183.03m. The counter closed at 85.5 sen.

Datasonic gets 3-month extension to supply identity cards

The original contract value was RM50.12m. The extension is for the supply of 585,000 raw MyKad, 5,437 MyTentera and 400 MyPOCA for the period of 15 Feb-14 May. The value of the extension is RM12.53m including consumables. One of the conditions is for Datasonic to furnish a RM2.51m performance bond to the Ministry of Home Affairs. For 9MFY2023 ended 31 Dec, the company posted net profit of RM53.66m compared with a net loss of RM3.12m year-on-year while revenue increased to RM239.8m against RM82.09m. For 3QFY2023 ended 31 Dec, the company’s net profit was RM16.73m as compared to RM1.51m previously. Revenue more than doubled to RM82.09m from RM35.95m. Pent-up demand for passports has been strong after the reopening of international borders and will sustain in the next quarters. The company also plans to diversify its income stream to include digitalisation and payment support services, potentially in competition with MyEG. The counter closed at 45 sen.

Sunway REIT buys EPF’s Giant properties

The real estate investment trust (REIT) is the 2nd largest listed in Malaysia based on property values as at 31 Dec 2022. It entered into a conditional sale and purchase agreement with Kwasa Properties – a wholly-owned subsidiary of the Employees Provident Fund (EPF) – for RM520m cash. The hypermarket properties are located in Kinrara, Putra Heights, USJ, Klang, Ulu Klang and Plentong, Johor. Knight Frank valued the properties at RM593m. The purchase price for each property is at a discount of 5.8%-22.3%, or 12.3% on average. The properties are governed by triple-net lease agreements and are income generating. The acquisition is expected to be completed in 4Q2023. The counter closed at RM1.57, up year-to-date 7.53% from RM1.46 on 3 Jan.

Singapore’s GIC and Temasek invest in Stripe

The financial services company based in Ireland – famous for its internet payment gateway that powers 20CPE.com – announced a Series I fundraising of USD6.5b valuing the company at USD50b. Existing shareholders – Andreessen Horowitz, Baillie Gifford, Founders Fund, General Catalyst, MSD Partners and Thrive Capital – are joined by new investors – Singapore’s GIC and Temasek, and Goldman Sachs – in participating in the exercise. The issuance proceeds will be used to provide liquidity to employees and address employee withholding tax obligations related to equity awards, resulting in the retirement of Stripe shares that will offset the issuance of new shares to Series I investors. The money is not needed for the company’s operations. Goldman Sachs is the sole placement agent while JPMorgan is the financial adviser.

Petronas offers 78% more than 2nd highest bidder for NTPC Green Energy

The Malaysian company bid INR38b (USD460m) or INR27.52 per share to buy a 20% stake in the subsidiary of NTPC – India’s largest power producer which is also state-owned. NTPC had expected INR30b when is asked for expressions of interest in NTPC Green Energy (NGEL) in 2022. The Petronas offer values the company at USD2.3b. The 2nd highest bidder – REC Ltd – offered INR15.47 per share whereas Indraprastha Gas Ltd offered INR6.67 per share. NTPC aims to use the proceeds to expand its non-fossil business, having budgeted USD30b investments in the next 10 years to increase non-fossil in its portfolio mix from 9.41% to 45%. NGEL will drive its plans to add 60 GW of renewable energy to a total group capacity of 130 GW by 2032. India itself has committed to becoming net zero by 2070 and will have 50% of its installed electricity capacity from renewables by 2030, equivalent to 500 GW. The country currently has 412 GW of installed capacity of which 30% comes from renewables. This is the first time a state-run company offered a stake in a renewable energy arm amid increased foreign interest. Renewables are a top 5 industry for foreign funds, taking a 5% share of inflows for Apr-Sep 2022 compared with 3.3% in Apr-Sep 2021. Apart from India, Petronas’ key markets also include Australia.