FBMKLCI 1541.27 DJ+80.60 CRUDE OIL 99.96 RM 3.009

TSH reported its 1Q2011 earnings surged 105% to RM23.95 million from RM11.26 million a year ago boosted by its Indonesian palm oil operation where fresh fruit bunches (FFB) production grew by 48%. Revenue rose 5.04% to RM252.59 million from RM240.47 million while earnings per share were 5.84 sen compared with 2.75 sen.

Tan Chong Motor Holdings Bhd’s net profit rose 14.5% to RM74.08 million in the first quarter ended March 31, 2011 from RM64.67 million a year ago, boosted by the sale of its Nissan Teana. Revenue increased by 29.8% to a record high of RM1.13 billion from RM870.36 million. Earnings per share were 11.35 sen from 9.91 sen a year ago.

Encorp Bhd swung into the red in the first quarter ended March 31, 2011 with net losses of RM378,000  compared with net profit of RM246,000 a year ago. The losses were despite a 33% increase in revenue to RM63.35 million from RM47.63 million. Loss per share was 0.17 sen compared with earnings per share of 0.12 sen.

DUTCH LADY MILK INDUSTRIES BHD []’s net profit for the first quarter ended March 31, 2011 rose 36.2% to RM28.34 million from RM20.81 million a year earlier, due mainly to higher sales, favourable sales mix and cheaper carry-over stocks. Revenue for the quarter rose to RM196.64 million from RM170.45 million in 2010. Earnings per share were 44.28 sen while net assets per share was RM3.53. It declared a special gross interim dividend of 30 sen per share in respect of the financial year ending Dec 31, 2011 to be paid on July 1.

Hard disk drive manufacturer JCY International Bhd’s net profit for the second quarter ended March 31, 2011 slumped 81% to RM12.46 million from RM65.88 million a year ago. The decline in earnings were due mainly to increase in the cost of production resulting from increase in the cost of raw materials like aluminium and stainless steel and also increase in labour cost. JCY’s revenue for the quarter fell 27.7% to RM397.43 million from RM549.69 million. Earnings per share were 0.61 sen while net assets per share was 43.08 sen.

For the six months ended March 31, JCY’s net profit tumbled to RM19.97 million from RM143.36 million, while revenue fell to RM836.34 million from RM1.08 billion in 2010.

Deleum Bhd which provides a diverse range of supporting specialised products and services for the oil and gas industry, has submitted tenders for contracts worth RM200mil. Group managing director Nan Yusri Nan Rahimy said the value of its current contracts stood at about RM1bil and they would end anywhere from the end of this year until 2016. The new contracts, meanwhile, were scattered between now and the middle of next year, he told reporters after the company's AGM here yesterday.

PJI Holdings Bhd, a Malaysian engineering services group, fell to a two-week low in Kuala Lumpur trading after its third-quarter net loss widened to RM6.15 million from a year earlier.  The stock slid 5.1 per cent to 18.5 sen at 9:41 a.m. local time, set for its lowest close since May 4.

Dutch Lady Milk Industries Bhd, a Malaysian dairy products maker, rose to a five-month high in Kuala Lumpur trading after announcing a 36 per cent jump in quarterly profit and plans for a special interim dividend. The stock climbed 1.1 per cent to RM17.76 at 9:08 a.m. local time, set for its highest close since Dec. 22

Latexx Partners Bhd, a Malaysian rubber-glove maker, rose in Kuala Lumpur trading after receiving an offer to merge with rival YTY Industry Holdings Sdn Bhd in a transaction valued at RM1.37 billion. The stock advanced 1.6 per cent to RM2.55 at 9:11 a.m. local time, extending yesterday’s 4.6 per cent gain. Latexx will buy four units of YTY by paying RM409.5 million in cash and the balance RM955.5 million in new stock at RM2.50 a share, the company said in a statement in Kuala Lumpur late yesterday.  Latexx will deliberate on the offer, which will remain open for 21 days, it said.

Analysts cautious on billionaire's hard-disk drive maker JCY International

WHEN news that low-key Malaysian billionaire Yong Yoon Kiong's company JCY International Bhd was to be listed on Bursa Malaysia first hit the market back in 2006, there was a lot of excitement.

Not only was the hard-disk drive maker going to be the largest technology firm ever listed on Bursa, it was also supposed to be the biggest initial public offering (IPO) for South-East Asia in many years.

The listing however did not materialise that year.

JCY, which is one of the world's major suppliers to the two global hard-disk drive giants, Western Digital and Seagate Technology Inc, finally made its long-awaited debut on the local bourse on Feb 25 this year. But if its share price performance thus far and latest financial results are anything to go by, it is quite safe to say that JCY has not lived up to market expectations.

The stock has shed close to 50% of its price since its listing to settle 78 sen on Friday, which was also the lowest. In contrast, the benchmark FTSE Bursa Malaysia KL Composite Index has put on more than 18 % in the same period.

Against its high of RM1.98 achieved on May 3, the stock is trading at a 60% discount. For its IPO, JCY had set the institutional offer price at RM1.60, while the retail portion was priced at RM1.52. For its latest quarter ended Sept 30, JCY incurred a net loss of RM22.56mil against a net profit of RM73.5mil made a year ago, largely on rising expenses and foreign exchange losses. Observers noted that there could be shareholders selling out and some could even be doing so below their IPO prices because of the lower entry cost.

JCY finance executive director James Wong was quick to point out that these issues should not be too much of a concern.

Malaysian investors do not understand tech stocks; you've got to be in for the long-haul, he told StarBiz.

When times in an industry like ours become challenging, we restructure, we adapt and we come off stronger.

The company is working on its labour issues where in the latest quarter, it had incurred an additional RM8mil in workers' salaries due to manpower shortage that resulted in some operations being outsourced and pay rise for the local workers.

We plan to shift some of our labour-intensive operations to China where labour is much cheaper, Wong said.

It currently has about 16,000 workers at its factories in Johor Baru and Penang. Wong said Western Digital had guided for a disappointing December quarter while the March quarter was traditionally a weak one for the industry.

But demand will come back, it always does. We've been in this business for a long time, we understand the cycles, he noted.

JCY has started supplying its components to South Korean and Japan customers to counter the weak demand from its Western customers that are still struggling to surface from the economically challenging times although the impact on bottomline is not expected to be felt so soon, according to Wong. Wong also noted that to his knowledge no major shareholders were selling their stakes in the firm. He added that Yong, the founder of the firm, still held close to 75% stake in JCY.

When the company was listed, some market observers pointed out that valuations were far too high. JCY's IPO was priced at a historical price-earnings (PE) multiple of 15 times when stocks in such an industry which is considered highly cyclical usually trade at PEs of less than 10 times.

Granted, JCY was priced before the acceleration of concerns of a double-dip in the United States, a major customer for the company.

Meanwhile, following the latest results of the firm, some analysts have turned cautious on JCY. In recent notes to clients, analysts said higher wages, shortage of workers, unfavourable foreign exchange rates and high raw material prices would continue to remain challenges for the firm for some time.

http://biz.thestar.com.my/news/story.asp?file=/2010/12/6/business/7553769&sec=business