LCL says US-based theme contractor potential investor

LCL CORPORATION BHD, whose fortunes have been battered following its over exposure to the Dubai property market, has identified US-based KHS&S as a potential investor to regularise its financial condition.LCL, an interior out-fit company, said KHS&S is one of the leading theme contractors in the US and has built major theme parks in the world. They include Disney Land, Disney World, Universal Studio, Red Rock Casino, Sea World and the Las Vegas MGM Casino. "LCL will discuss, deliberate and outline the regularisation plan with the representatives from KHS&S on the details of LCL’s regularisation plan. LCL will make the necessary announcements to Bursa Securities accordingly in due course," it said on Friday, Jan 29. It said KHS&S has expanded to the Middle East, China and Eastern Asia. It has 11 major offices in the USA and its regional offices include Macau, Hong Kong, Kuala Lumpur, Bangkok and Singapore. KHS&S had completed over 3,000 projects worldwide and their profile can be found at www.khss.comMeanwhile, LCL also said its subsidiary, Authentique Gallery (M) Sdn Bhd, had on Jan 29 received notices of demand from Messrs Iza Ng Yeoh & Kit on behalf of PUBLIC BANK BHD for arrears amounting to RM1 million.LCL's subsidiary LCL Furniture Sdn Bhd is also in arrears amounting to RM114.58 million owing to Affin Bank Bhd, Bank Islam Malaysia Bhd, The Royal Bank of Scotland Bhd and AmBank (M) Bhd.

Jetson, China company in JV for construction project bid

KUMPULAN JETSON BHD has inked an MoU with China State CONSTRUCTION Engineering (Hong Kong) Ltd (CSCHK) to look into the possibility of tendering for a construction project along Jalan Stonor, Kuala Lumpur.It said on Friday, Jan 29 the project involves two blocks of office building, 50 stories and 38 stories each, and a 10 storey podium block for Naza TTDI Sdn Bhd."The award of the project could be by way of tender or direct negotiation depending on the employer (Naza TTDI)," it said.Under the JV, Kumpulan Jetson will hold a 60% stake and CSCHK the remaining 40%.

Gadang’s 2Q net up 88% to RM3.5m

GADANG HOLDINGS BHD’s (GHB) net profit surged 88% to RM3.52 million in its second quarter ended Nov 30, 2009 from RM1.87 million a year earlier mainly due to lower cost.Revenue fell 6.9% to RM62.37 million from RM66.98 million, while basic earnings per share (EPS) rose to 2.98 sen from 1.59 sen. No dividend was declared.For six months to Nov 30, 2009, net profit rose 67% to RM7.37 million from RM4.42 million a year earlier mainly due to improved gross profit margins in the CONSTRUCTION division and cost savings. Revenue growth was relatively flat at RM120.78 million versus RM119.94 million previously.

CIMB Research positive on construction, building materials

CIMB Equities Research expects CONSTRUCTION sector growth and fundamentals for the building materials sector to stay positive in 2010 and beyond.
It said on Thursday, Jan 28 the growth should be sustainable given the implementation of larger government and private sector jobs this year, and increased construction on the property side.
The tabling of the 10th Malaysia Plan (10MP) in June 2010 should provide more visibility on infrastructure and construction spending beyond 2010.
CIMB Research said although the outlook for building materials appears positive, we continue to rate the building materials sector a NEUTRAL, it believed the earlier positive newsflow on stimulus packages and the potential pick-up in construction activities have already been priced in.
The pricing in has been for the biggest player in its coverage, Lafarge Malayan Cement. Ann Joo remains its top pick in the building materials sector.
“However, for exposure to pump-priming, we prefer direct exposure to the contractors,” it said.
CIMB Research said demand for Ann Joo’s products will pick up and possibly even gain momentum in 2H. Its target price remains at RM3.55, still pegged to 12.8 times P/E, a 15% discount to our target market P/E of 15 times.
It is Neutral on Lafarge as the share price has already priced in the positive newsflow on construction activities and stimulus packages. It retains its target price of RM6.96, which it will continue to base on a blend of its target market P/E of 15 times and a P/BV of 1.1 times.
“We maintain our Outperform rating (Tasek Corporation) in view of the potential strong pick-up in construction activities in 2010. With a cash hoard of RM332 million as at September 2009, it is in an excellent position to capitalise on M&A opportunities in the region.
“Our target price remains at RM5, still based on a blend of 12 times P/E and 0.8 times P/BV. These target valuations are a discount to Lafarge’s 15 times target P/E and 1.1 P/BV. Potential re-rating catalysts include stronger demand from pump-priming which could boost sales and selling prices,” it said.

Sunrise-Sime JV makes good business sense

While SUNRISE BHD's recent decision to venture out of its property development forte in the upmarket Mont'Kiara enclave came as a surprise to analysts, the move has received the thumbs-up from them.This is by virtue of Sunrise's good business sense and also in anticipation of less geographical concentration risk amid more business opportunities ahead for the upmarket real estate developer as it expands its operations.On Tuesday, Sunrise and Sime Darby Property Bhd formed a collaboration to jointly undertake a RM1 billion freehold mixed development on 20.95 acres (8.48ha) of land within the Bukit Jelutong enclave in the Klang Valley.Their 50:50 JV company Baywood Avenue Sdn Bhd has acquired the development sites for RM114.08 million or RM125 per sq ft (psf) from the Sime Darby group. Accordingly, Sunrise's share of the purchase price amounts to RM57.04 million.In a note to clients, ECM Libra Investment Research said the JV in Bukit Jelutong made good business sense because there was no major high-rise residential and commercial development there yet.It said the JV allowed Sunrise to replicate its success in developing Mont'Kiara in another prime location. "We believe there is a captive market for the product offerings proposed by the JV," ECM Libra Research said.It said the RM1 billion gross development value (GDV) for the mixed project was deemed a conservative estimate considering that the intended 2.7 million sq ft of built-up area translated into a selling price of RM370 psf. This is lower than Sime Darby's commercial project which commands between RM270 psf and RM1,025 psf.Based on the initial GDV and assuming a net margin of 18%, Sunrise's share of net earnings will be RM90 million over the development period, according to ECM Libra.As Sunrise's revenue, beginning financial year ending June 30, 2011 (FY11), will be recognised only upon completion of the PROPERTIES, instead of via the progress billing method practised currently, ECM Libra foresees that earnings contribution from this new project will start only in FY14.The new revenue-recognition method is based on the International Financial Reporting Interpretation Committee's Interpretation 15 (IFRIC 15) policy which takes effect from July 1.The planned project comprises retail entities, shop offices, office suites and serviced apartments.It will be developed in five phases from 2011 onwards, and is due for completion in seven years from the launch of the first phase.Meanwhile, RHB Research Institute analyst Low Yee Huap said the collaboration had come as a surprise as Sunrise had in the past expressed its preference for a healthier balance sheet and emphasis on its current landbank within Mont'Kiara."We are neutral on this JV as the purchase price of RM125 psf is on par with the asking prices of about RM80 to RM150 psf around that area."However, this JV would allow Sunrise to diversify its landbank (hence, reduce concentration risk) as well as pave the way for future collaboration between Sunrise and Sime Darby Property," Low said.Assuming a profit margin of 30% and development period of seven years, Low said RHB's earnings estimates for Sunrise in FY12 would potentially increase by 1%.OSK Research Sdn Bhd analyst Mervin Chow Yan Hoong said Sunrise's portion, amounting to RM57.04 million of the purchase price for the land, was fair as it accounted for 11.4% of the developer's 50% share of the estimated GDV of RM1 billion for the upcoming project."The alliance, we reckon, is a strategic one as this will enable Sunrise to venture out of its traditional foothold in Mont'Kiara's real estate while Sime Darby will be able to leverage on the former's expertise in developing integrated high-end commercial and residential properties," Chow said.Maybank Investment Bank Research analyst Ong Chee Ting said valuation for Sunrise shares was undemanding and it was the cheapest property stock under its coverage with nearly two-year earnings' visibility.The stock, which trades at a price-to-earnings ratio of 6.8 times FY11 earnings and three quarters (0.75 times) of its revised net asset value (RNAV), is deemed to be under-appreciated."We are positive on this latest development as it paves the way for future collaboration between Sunrise and Sime Darby Property, which has 14,800ha of landbank in the country."Assuming a 20% pre-tax margin, the project will add RM10 million in annual net profits (two sen earnings per share) over a seven-year period, and 11 sen to our RNAV estimate," Ong said. The research house reiterated its buy call with a RM2.86 target price for Sunrise shares.RHB, meanwhile, retained its fair value of RM2.64 and outperform call for the stock while OSK maintained its target price of RM2.29 and neutral recommendation.All three research houses maintained their earnings forecast for Sunrise, pending further clarification from the developer.ECM Libra reiterated its buy on Sunrise and maintained its target price of RM3.30, pending an analysts' briefing today and migration to RNAV valuation method due to earnings volatility from the introduction of IFRIC 15."Sunrise is significantly undervalued and we believe recent positive news flow on new projects and better-than-expected sales in MK 28 (28 @ Mont'Kiara) will narrow the valuation gap," the research house said.

Gadang to buy Sg Besi land for RM33m

GADANG HOLDINGS BHD has proposed to acquire a leasehold parcel of residential land off the Sungai Besi Highway in Sungai Besi here for RM33 million or RM62 per sq foot.In a statement today, Gadang said its sub-subsidiary Natural Domain Sdn Bhd had inked a sale and purchase agreement (SPA) with the vendor, GSS PROPERTIES Sdn Bhd, to acquire the land measuring about 49,377.47 square metres (531,494.15 sq ft).It proposed to undertake a residential development there in the future.

Sime Darby, Sunrise to develop RM1b project

The tie-up to develop a RM1 billion integrated commercial project in the Bukit Jelutong township means that both companies can take advantage of each other's strengths
Sime Darby Property Bhd (Sime Property) is partnering Sunrise Bhd to develop a RM1 billion integrated commercial project in the Bukit Jelutong township in Selangor next year.It is the first tie-up between Sime Property and Sunrise. Sime Property is known for its landed properties, while Sunrise is well known for its high-end projects in Mont'Kiara, Kuala Lumpur.The deal means that both companies can take advantage of each other's strengths, Sime Property managing director Datuk Tunku Putra Badlishah Tunku Annuar said."We are always looking at ways to accelerate the land development with reputable and like-minded developers like Sunrise. This partnership will further enhance the value of properties at the township," he said after signing the joint-venture agreement in Bukit Jelutong, Shah Alam, yesterday. Sime Property has 14,800ha in Greater Klang Valley.
The two firms will have equal stakes in the joint-venture company, Baywood Avenue Sdn Bhd. They plan to build retail, shop-offices, office-suites and serviced apartments on some 8.4ha.The project, located opposite Sime Darby Pavilion, will be developed in five phases over seven years, beginning next year.The joint venture will buy the land from a subsidiary of Sime Property for RM118.1 million, or RM125 per sq ft.Sunrise executive chairman Datuk Tong Kooi Ong said the vision is to develop sustainable, or green, properties that will appreciate in value.Sime Property and Sunrise may even do more projects together."We have completed the first part of the marriage today. This means, going forward, things will be easier for us as we have already built a base here. If the project goes well and the chemistry is there, the joint venture could be extended," Tunku Putra Badlishah said.It is learnt that Sunrise may want to partner Sime Property to develop pockets of land along the Guthrie Corridor Expressway.Tunku Putra Badlishah also said that the project will be the first of many joint ventures Sime Property will be forming with reputable developers. It is already in talks with several other developers and may ink a second deal soon.

HOCK SENG LEE BERHAD

The Board of Directors of Hock Seng Lee Berhad (“HSL”) is pleased to announce that HSL has received the letter of acceptance of tender on 21 January 2010 from Jabatan Kerja Raya, Sarawak, for the Construction and Completion of Proposed Lubok Antu/Lemanak/Engkari Road (Package B), Sri Aman Division (Phase III – From Ng. Kesit to Ng. Gugu) (“the Project”). The contract sum for the Project is Ringgit Malaysia Thirty Five Million Seven Hundred Ninety Eight Thousand and One Hundred only (RM35,798,100.00).The scope of works includes earthworks, drainage, flexible pavement and bridges. The works of the Project will be due to be completed by February 2011.The contract is expected to contribute positively to the earnings and net assets of HSL Group for the financial years ending 2010 to 2011. None of the directors and/or major shareholders of HSL or persons connected to them have any interest, direct or indirect, in the above contract.

SAPURACREST PETROLEUM BERHAD

Notice of Award to Offshore International FZC for Transportation and Installation of Platform Jackets in Mumbai High North Field

The Board of Directors of SapuraCrest Petroleum Berhad (“SapuraCrest”) is pleased to announce that Offshore International FZC (“OIFZC”) has received a Notice of Award (“NOA”) from Larsen & Toubro Limited (“L&T”) for the provision of works and services for the transportation and installation of four platform jackets in the Mumbai High North Field, offshore Mumbai (“Works”).Commencement of the Works is expected to be in November 2010, with completion taking place in January 2011. The price for the Works is approximately USD 65 million.OIFZC is a joint venture company between L&T and SapuraCrest. L&T and SapuraCrest indirectly hold 60% and 40% respectively of the shareholding in OIFZC. The NOA will have no effect on the issued and paid-up capital of SapuraCrest and is expected to contribute positively to the Group's earnings and net tangible assets for the financial year ending 31 January 2011.None of the Directors or Substantial Shareholders of SapuraCrest or persons connected with them has any direct or indirect interest in the NOA.

Fajarbaru eyeing Klang Valley land for property venture

Construction outfit, Fajarbaru Builder Group Bhd, is looking to acquire landbank in the Klang Valley towards venturing into the property development business, besides bidding for larger and more sophisticated construction projects.
Its managing director and CEO Datuk Low Keng Kok said these were part of a two-pronged strategy the company had in place after the completion of its capital-raising exercise through a private placement at the end of last year.
“We are now in talks with several parties for land within the Klang Valley for housing project development, as the area is still the magnet for natural migration that will create demand for housing,” he told The Edge Financial Daily.
At the moment, the group has an 80ha land in Port Dickson, Negri Sembilan. While work has yet to commence, Fajarbaru plans to use the land for medium- to high-end property development.
Fajarbaru in October last year announced the completion of its private placement exercise with the listing of 14.1 million new shares that were issued at RM1.13 each.
With the completion of the private placement exercise, Fajarbaru has a total of 164.34 million
shares outstanding, while free float stands at 52.72% or 86.64 million shares, according to Bloomberg data.
In terms of construction jobs, Low said the group had submitted bids for the RM2 billion new low-cost carrier terminal (LCCT) near the Kuala Lumpur International Airport. Fajarbaru’s order book balance stood at RM505 million as at end-March 2009.
The group has vast airport-related experience, having previously been awarded a RM124 million contract for the expansion of the current LCCT in Sepang in 2008. The contract was a follow-up job from its previous RM108 million contact for the LCCT in May 2005, which was the group’s first major project.
Since then, Fajarbaru has secured at least two key construction contracts worth a total of RM440 million in the financial year ended June 30, 2008 (FY08), including a RM316 million subcontract for the Seremban-Gemas electrified double-tracking project from India’s Ircon International, the main contractor for the southern stretch.
For FY09, Fajarbaru recorded a net profit of RM18.12 million, up 32.7% from 13.65 million in the previous year, while revenue rose 110.7% to RM184.6 million from RM87.61 million.

The stock rose four sen or 3.64% to RM1.14, with 1.63 million shares done last Friday. The shares have gained by 9.62% so far this year and are trading at 7.51 times price-to-earnings ratio compared with the industry average of 13.33 times.

PJI HOLDINGS BERHAD

Letter of Award to KEJURUTERAAN TROLKA SDN. BHD. (“KTSB”) by BLACKSTONE SEVEN SDN. BHD. (“BSSB”)

The Board of Directors of PJI wishes to announce that Kejuruteraan Trolka Sdn. Bhd. (Company No.157615-W) ("KTSB"), a wholly owned subsidiary of the Company has on 14 January 2010 accepted a Letter of Award from Blackstone Seven Sdn. Bhd. (Company No.826048-V) ("BSSB") for Piling and Building Works for “Cadangan Membina 1 Blok Bangunan Komersial Yang Terdiri Daripada: (A) Menara Pejabat 16 Tingkat Yang Mengandungi 1 Tingkat Ruang Niaga, 8 Tingkat Tempat Letak Kereta, 6 Tingkat Ruang Pejabat Berserta 1 Aras Penthouse, (B) Kedai Pejabat 5-7 Tingkat Dengan Mezanin Di Tingkat Bawah Dan Tempat Letak Kereta Di Atas Bumbung, Di Atas 1 Aras Basement Tempat Letak Kereta Di Lot PT No.3628, H.S.(D) 78002, Jalan SS6/6, Kelana Jaya, Selangor Darul Ehsan” (“the Proposed Project”).KTSB shall be the Main Contractor for the constructions works of the Proposed Project. The Contract Sum of the Proposed Project is RM30,665,335.00 (Ringgit Malaysia Thirty Million Six Hundred Fifty Five Thousand Three Hundred Thirty Five only).

Naim Holdings Berhad

LETTER OF AWARD FOR 275KV OVERHEAD TRANSMISSION LINE FOR BAKUN-SIMILAJAU TRANSMISSION SYSTEM

Naim Holdings Berhad (“the Company”) is pleased to announce that the Company’s unincorporated joint venture, Sinohydro-Naim JV has on 12 January 2010 received a Letter of Award for Package B Part I and II of the 275KV Overhead Transmission Line Projects for Bakun-Similajau Transmission System from Sarawak Energy Berhad for a lump sum of Ringgit Malaysia Two Hundred and Nine million, one hundred and seven thousand, nine hundred eighty-six only (RM209,107,986.00) with a contract period of 24 months.The above contract is expected to contribute positively to the earnings of the Group for the financial year ending 31 December 2010.Save for Datuk Abdul Hamed Bin Sepawi who is the Chairman of Sarawak Energy Berhad, none of the Directors or Substantial Shareholders or persons connected with them has any interest, direct or indirect, in the transaction.

Gadang Eng JV gets RM291m LCCT job

Gadang Holdings Bhd’s wholly owned subsidiary Gadang Engineering (M) Sdn Bhd (GESB) and Bukit Jerneh Quarry Sdn Bhd (BJQ) have received a letter of acceptance from Malaysia Airports Holdings Bhd for part of the proposed low-cost carrier terminal (LCCT) worth RM291.1mil.
In a filing to Bursa Malaysia yesterday, Gadang said the scope of works under the contract comprised site preparation, earthworks and main drainage for Runway 3 and its associated taxiways which were expected to be completed on Dec 18.
“The contract is awarded to Gadang-BJQ joint venture, an unincorporated joint venture comprising GESB and BJQ in the proportion of 70:30 respectively,” it said.
Gadang said the contract was expected to have a positive impact on the earnings and net assets of the group for the financial years ending May 31, 2010 and 2011.

Ho Hup shares plunge the most in two years

Shares in Ho Hup Construction Co Bhd plunged the most in two years yesterday, snapping a five-day winning streak.
The stock closed 36%, or 72 sen, lower to RM1.27, wiping out more than RM73mil in its market capitalisation. Around 5 million shares changed hands.
Its price had tripled in the past five days.
While the company has said that it was not aware of the reason behind the surge in its share price, analysts said the fall in price was fuelled by investors who were cautious on the company’s fundamentals due to the ensuing tussle between shareholders.
StarBiz reported yesterday that the board of directors of Ho Hup would fix a meeting to discuss the intention of Low Chee & Sons Sdn Bhd and Choo Soo Har to call a special meeting for the removal of the current board and appointment of a new one.
Low Chee & Sons and Choo are substantial shareholders in the company.
They had earlier announced to Bursa Malaysia their intention to call for an EGM on Feb 4 for the removal of seven members of the board and appointment of six others.
Ho Hup group managing director Lim Ching Choy had told StarBiz that he was unsure about the motive for the removal of the members of the board, which included himself and deputy executive chairman Datuk Vincent Lye Ek Seang, also a major shareholder.
“We’re going to have a board meeting to discuss the matter but we haven’t fixed the date yet,” he had said.
This development follows the ongoing tussle at Ho Hup, where Datuk Low Tuck Choy, one of three owners of Low Chee & Sons, had opposed the sale of two parcels of land held by Ho Hup and approved by the board headed by Lye on the basis that these were being sold at below market rates.
Meanwhile, in a statement to the stock exchange yesterday, Ho Hup said it had instructed its solicitors to commence legal proceedings against Low Chee & Sons and Datuk Low for defaming the company through the media.
The solicitors filed the writ indorsed with a statement of claim yesterday, the company said.
In another statement, Ho Hup said it received yesterday documents from Low Chee & Sons and Choo pertaining to the proposed Feb 4 EGM.

Mudajaya seeks to raise RM185.8m

Mudajaya Group is planning a share placement exercise which may raise RM185.8m to be used as working capital and to fund new investments, possibly in India. Mudajaya is presently involved in a power generation project in India through its wholly owned unit Mudajaya Corp Bhd which controls a 26% stake in RKM Powergen Private Limited, a SPV undertaking the project. While Mudajaya is engaged in the construction of 1,440MW coal fired plant in Chattisgarh, the company was also reported to be bidding for various projects worth RM400m in India.

HO HUP CONSTRUCTION COMPANY BHD