Capital markets news summary for Fri 24 Mar 2023

Capital markets news summary for Fri 24 Mar 2023

SunCon bags RM604.86m Johor Bahru RTS project

Sunway Construction Sdn Bhd signed a letter of acceptance (LOA) for Package 1B – advance works for station and viaducts – and Package 5 – terrestrial viaducts and ancillary structures – of the Johor Bahru-Singapore Rapid Transit System (RTS) project. The LOA was issued by Malaysia Rapid Transit System Sdn Bhd, the project owner and a subsidiary of Mass Rapid Transit Corporation which developed the mass rapid transit lines in the Klang Valley. The project duration is 26 months and is scheduled to be completed in 2Q2025. The company will start work in 2023 and begin earning revenue from this year onwards. The company’s order book has grown from RM4.1b in 3Q2022 to RM5.3b in 4Q2022. This year, it has added RM663m to its order book including the RTS project. The RTS project – which is estimated to cost RM10b – will connect Bukit Chagar in Johor Bahru to Woodlands in Singapore, serving 10,000 passengers per hour each way. It was 20% completed in Dec 2022, and is expected to commence passenger services by end-2026. The counter closed at RM1.62.

Gamuda’s 2Q profit climbs 9.8% from overseas earnings

Net profit was up from RM177.13m in 2Q ended 31 Jan 2022 to RM194.62m in 2Q ended 31 Jan 2023. Revenue was up 18.39% from RM1.22b to RM1.44b. Even tough earnings per share improved from 7.05 sen to 7.46 sen, no dividends were declared. Net profit jumped 4 times from RM329.5m in 1H2022 to RM1.36b in 1H2023 boosted by a one-off gain of RM1b from the sale of 4 highways to Amanat Lebuhraya Rakyat in Oct 2022. Revenue climbed 43.98% from RM1.91b to RM2.75b. Excluding the one-off gain, core earnings rose 17% to RM385m, contributed by the construction and property divisions. The company’s overseas projects picked up pace and contributed 38% of core earnings compared to 18% previously. Moving forward, its sales performance depends on property sales, and a pick up in the construction of the Sydney metro tunnelling package, the Coffs Harbour bypass and the M1 motorway extension projects. It has an order book of RM21b – including AUD2b from the Downer transport projects – and RM5.4b unbilled property sales. The counter closed at RM4.14.

Yinson 4Q profit surges 158%

Net profit grew from RM65m in 4Q ended 2022 to RM168m in 4Q ended 31 Jan 2023. Quarterly revenue rose almost 3 times from RM741m to RM1.96b. For the full year, net profit climbed 46% from RM401m to RM586m, while revenue expanded 75% from RM3.61b to RM6.32b. Despite the stellar results, the company declared only 1 sen in dividends bringing the total to 2 sen. In comparison, the company paid 6 sen dividends in FY2022. The increase in global energy demand is driving upstream capex spending. The company’s key markets – Brazil and West Africa – are the biggest markets for floating production storage and offloading (FPSO) vessels. Yinson has a total order book of over USD22b (RM97.3b). The company’s renewable energy business now operates 177MW. In addition, 3.3GW are under early-stage review, 1.1GW are in the process of planning consents and 770MW are in early-stage construction. The counter closed at RM2.42.

Kulim consolidates plantation business under Johor Plantations

Its subsidiary – which was formerly known as Mahamurni Plantations Sdn Bhd – will now own a landbank of 60,000 hectares, 23 estates and 5 mills. It will also operate the trading and services activities, and lead the renewable energy initiatives including the biomethane plant and 5 biogas plants. Mohd Faris Adli Shukery who joined Kulim in Oct 2020 has been appointed the managing director. Tan Sri Dr Ismail Bakar who was appointed chairman of Kulim in May 2022 will also chair Johor Plantations’ board. The latest development appears in line with reports on Kulim’s plans to raise RM1b in an initial public offering (IPO) this year. In May 2022, it was reported that Johor Corporation was considering the IPO to take advantage of strong crude palm oil prices. Palm oil averaged RM5,100 per tonne in 2022 and has since been projected to fall to an average of RM3,760 in 2023.

Straits Energy associate to be listed on Nasdaq

CBL International Ltd – a 38% associate of the oil trading and bunkering service provider – received in-principle approval from Nasdaq on 20 Mar. In Aug 2022, Straits Energy announced that CBL International – which is the ultimate holding company of Banle International Group Ltd – was proposing to list on the Nasdaq via an initial public offering (IPO). Banle is a bunkering facilitator that supplies marine fuel for container liner vessels and has operations in Korea, Hong Kong, China, Singapore and Malaysia. The market for marine fuel in 2019 alone was 100m metric tonnes. On 22 Mar, CBL International announced the IPO price of USD4 per share. The issuance of 3.33m new shares will raise USD13.3m. With the over-allotment option of 498,750 shares, total proceeds could reach USD15.3m. The counter closed at 12.5 sen.