Capital markets executive summary | Tue 26 Sep 2023

Capital markets executive summary | Tue 26 Sep 2023

Dialog to build malic acid plant in Gebeng

Dialog Group Bhd’s wholly owned Dialog Malic Sdn Bhd will build, own and operate the speciality chemical plant which will be located in the integrated chemical site operated by BASF Petronas Chemicals Sdn Bhd. This will be Dialog’s 1st venture into manufacturing specialty chemicals. Malic acid has a steady market demand primarily as a food additive. Dialog will undertake the engineering, procurement, construction and commissioning of the 12k metric tonnes per annum plant at an investment value of USD80m. The feedstock will be supplied by local companies. The project will be completed in 2Q2026. Dialog will fund its portion of the project’s investment and working capital from internally-generated funds, bank borrowings and proceeds from sukuk issuance. The counter closed at RM2.16.

Agrobank’s AAA rating affirmed

MARC Ratings affirmed the financial institution rating of Bank Pertanian Malaysia Berhad (Agrobank) and the rating of its Islamic medium term notes programme. The rating reflects the bank’s status as a wholly government-owned development financial institution whose activities are guided by the policies of the Ministry of Agriculture and Food Security. Support from government and government-related entities form 48.4% of its funding profile at end-2022. Financing growth slowed down to 3.5% year-on-year to RM14.2b in 2022 with the contraction of the crops sector. Conversely, the retail and wholesale trade sector gained 14.1% and the household sector 9%, both forming 43% of the bank’s gross financing. Gross impaired financing (GIF) ratio increased from 6.4% in 2021 to 7.3% in 2022, and could rise since 26% of the financing portfolio is still under relief measures, down from 33% in 2021. Net financing income climbed 11.1% to RM726.8m in 2022, although net profit shrank from RM106.7m in 2021 to RM105.6m in 2022 because of the one-off Cukai Makmur. The bank’s core capital ratio was 20.5% and risk-weighted capital ratio was 25% at end-2022, in line with other domestic DFIs.
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TSH Resources secondary listing on SGX today

The company will be admitted to the official list of the Singapore Exchange Securities Trading Limited with the stock code “TSH” and trading on the Main Board will commence at 9am. The latest price at market close yesterday was RM1 per share (SGD0.29) according to the eligibility-to-list on the Main Board. Dual listing will strengthen TSH’s presence in Singapore, gain wider research coverage, attract the attention of international investors and traders who invest in SGX to diversify its shareholder base, and raise the profiles of its businesses and its subsidiaries. The counter closed at RM1.

Senheng buys its Central Distribution Centre

Wholly-owned Senheng Electric (KL) Sdn Bhd entered into a sale and purchase agreement with SDM Assets III Sdn Bhd, wholly-owned by Sime Darby Property MIT Development Sdn Bhd, to acquire its Central Distribution Centre (CDC) for RM75.8m. The CDC has 200,035 sq ft built-up area comprising a warehouse, offices and ancillary buildings on 6.6-acre industrial land in Klang. It is the main distribution hub for Senheng, where products from suppliers are received, stored and distributed to regional hubs and customers in the central region of Peninsular Malaysia. The CDC is currently leased and the acquisition will save RM4.2m of annual gross rental. The purchase price will be financed with RM45.8m bank borrowings and reallocation of RM30m from the initial public offering proceeds, which was designated for the territory champion expansion strategy. The acquisition will be completed in 4Q2023. The counter closed at 34 sen.

Saudi cargo firm IPO sold out in hours

SAL Saudi Logistics Services Co has 95% share of the cargo handling market in Saudi Arabia and also handles transit and export shipments. Revenue was SAR1.22b in 2022 and net income was SAR362m. In 1H2023, revenue growth was 15% year-on-year. Saudi Arabian Airlines Corp or Saudia owns 70% while Tarabot Air Cargo Services Ltd owns 30%. They plan to raise up to SAR2.54b (RM3.17b) by issuing 24m shares or 30% at SAR98-SAR106, which values the company at SAR8.48b. The bookbuilding period for institutional investors is until 1 Oct whereas the period for retail buyers is 11 Oct-13 Oct. However, SAL received orders for all shares across the price range hours after books opened. HSBC is the sole financial advisor, bookrunner, global coordinator, lead manager and underwriter for the Riyadh listing.