Titan Chemicals: Q207 result

Titan Chemicals net profit in Q2 is sharply lower as compared to Q1 result. The net profit for the company has been declining consistently from a high of RM241mil in Q406, to a lower net profit of RM156mil in Q107. With reference to the latest quarterly result from Titan, the net profit is RM80mil - which represents a drop of ~50% from Q107.


Nevertheless, Titan has declared a dividend of 3 sen (tax exempt).

The financial performance is still very depending on the difference between the cost of raw material and the selling price of finished goods.

I believe it is not worthwhile to hold this stock in the current stock market condition as the possibility to enjoy capital appreciatation is not high. The fluctuation of the stock price remains small and it is hard to see a surprise from them at the moment.

Uncertainty is the best word to describe Titan's financial performance ...

E&O: Q107 result

Good quarterly result posted by E&O ..

The Edge

KUALA LUMPUR: Eastern & Oriental Bhd (E&O) posted a 50.21% rise in net profit to RM15.24 million for the first quarter (1Q) ended June 30, 2007 from RM10.14 million a year earlier mainly from the contribution of its on-going projects.

Its revenue also rose by almost 50% to RM171.49 million. Earnings per share was 2.97 sen.

Announcing its 1Q results yesterday, E&O said the improved results were mainly due to the higher revenue from its on-going property development projects including Dua Residency, Idamansara and Seri Tanjung Pinang.

It said revenue generated by the hotel division had improved by 19.5% compared to the previous corresponding quarter.

Meanwhile, E & O Property Development Bhd's net profit for the 1Q ended June 30, 2007 jumped 75% to RM35.49 million from RM20.35 million on a 50.58% increase in revenue to RM163.98.
Earnings per share was 5.42 sen.

The company said that the better earnings reflected significantly higher contributions from its property division on the back of higher profit margin.

Top Property Developers honoured by The Edge

The top 10 are:

Bandar Raya Developments Bhd
Boustead Properties Bhd
E&O Property Development Bhd
IGB Corporation Bhd
IOI Properties Bhd
Island & Peninsular Bhd
SP Setia Bhd
Sime UEP Properties Bhd
Sunrise Bhd
Sunway City

Selangor Dredging Berhad

Kenanga has given very high target price for SDRED in a research report from them - RM1.84. Below are the important notes from the report:


1Q08 net profit of RM8.7m was within our expectations at 23% of our full year forecast of RM37.6m. 1Q08 net profit mainly attributed by stronger recognition of earnings from Park Seven which is fully sold and having completed the basement level is progressing rapidly above ground level. In addition, there was also the recognition from the sale of Ameera condominium units launched in January 2007 which are more than 70% sold.


QoQ, 1Q08 net profit was 19.8% lower than 4Q07 where one off gain and write back of accrued tax of RM6.1m and RM3.2m respectively was recognised. In comparison, 1Q08 operating profit of RM12.1m was 252.9% higher than 4Q07’s RM3.4m. 4Q07 is seasonally slower quarter given the shorter working days accounting for the festive holidays. In addition, the construction cost incurred at Ameera was not matched by progressive claims being ground clearing, piling and basement work. Marketing expenses for the launch in January 2007 was also expensed when incurred.

YoY, 1Q08 net profit was 280% higher! In 1Q07, Selangor Dredging only had Amansari and Park Seven projects to rely on. The progress of work for Park Seven was still at basement levels where progress billings were limited. In addition, the hotel made RM2.2m pre-tax loss compared to RM889,000 pre-tax loss in 1Q08. 1Q07 income tax rate was 42% due to unavailability of group relief for losses incurred by a subsidiary company.Tax rate was 11% in 1Q08 due to non-taxable income and tax losses brought forward. We expect tax rate to normalise to statutory rate in succeeding quarters.

We are maintaining FY08 and FY09 net profit forecast. The slated projects for launches are still on schedule. The RM230m 20 Trees will be launched this Saturday while the two Singapore projects worth RM620m will be launched in November and second half of 2008.


Maintain BUY with target price of RM1.84 based on sum of parts RNAV. We remain positive that the company is on the right track as the future development pipeline remains exciting and their projects have been well received. FY08E and FY09E PER multiples of 11.1x and 7.5x remains attractive.

Genting Berhad

Genting has released their quarterly result in this week and below is the comment from HDBS. HDBS is upgrading their call from HOLD to BUY with a target price of RM8.60.


Results
Genting’s 2Q07 NI included EI amounting to RM298.1m. Stripping this out, pretax profit from continuing operations came in at RM618.3m (+13% y-o-y; -2% q-o-q). Revenue surged 42% y-o-y given the inclusion of Stanley Leisure effective Oct
2006.
Nevertheless, operating profit was crimped by losses from Genting International (GIL SP) arising from fair valuation losses and impairment losses on intangible assets
totaling S$43.3m. This saw a 10ppt contraction in gaming EBIT margin to 28% (2Q06: 43%). Also, finance cost rose 2x to RM100.5m. 1H07 NI included EI amounting to RM872m. Stripping this out, pretax profit from continuing operations came in at RM1.2b (+20% y-o-y), in line with house and market expectation.

Outlook
We maintain our core pretax profit for continuing operations of RM2.5b for FY07
and RM3.0b for FY08. Core net profit is projected to come in at RM1.4b for FY07 and RM1.5b (+12% y-o-y), driven by higher gaming contribution from Resorts World and Stanley Leisure. Also, non-core earnings from plantation, oil and gas is expected to rise on the back of higher selling prices for the plantation sector and higher production output for the oil and gas division. The power division will also continue to provide firm operating
cashflow.

Dijaya Corporation

Most of the people from KL and Selangor know about Tropicana, which is among the most luxury residential area. However, most of them may not aware of the developer for this area. Tropicana is a project from Dijaya Corp.

It appears that this developer is out of the radar of most of the investors and analysts at this moment. The company feels that it is not the time to call analysts for a briefing untiil it has built up its landbank, according to its MD Tong Kien Oon in an interview.

Its share price is no trading significantly lower its net book value and estimated RNAV. It closed at RM1.42 last Friday and ths stock is trading at about 34% discount to its book value of RM2.16.

InsiderAsia believes the value of land owned by Dijaya is severely understated -Tropicana: cost RM10.54 psf vs market value of about RM150 psf; and
Damansara Indah: cost RM10.15 psf vs market value of about RM130psf.


In Tropicana, the company will be launching 400 units of low-rise condo with an indicative pricing of RM300 psf. The GDV is RM500mil.

In Damansara Indah, Dijaya launched 88 units of 3-storey semi-d with built up of about 6,200 sq ft and priced from RM2mil each. Two blocks of low-rise condo in the same area will be launched soon.

'Based on the upcoming launches, we expect Dijaya's profit too see a huge jump in the next 2 to 3 years' says an analyst.


Dijaya is also developing Tropicana City, valued at RM600mil in SS2 - 3-storey Tropicana Mall, a 24-storey block of serviced apartments and a 12-storey office tower.

The mall and office tower will be ready in 3Q of 2008 and the apartment block in 2009. The mall is expected to bring in rental income of between RM20mil to RM30mil per annum.

Lastly, Dijaya also has a stake in a JV company in India. It is developing a 25 acres land in Hyderabad, India and it is scheduled for launch in the 1H of 2008. Base on the stake in the JV company, the project is expected to bring in revenue of RM400mil.