Weekly Review – 5 November 2017 to 11 November 2017

HEXZA(3298)

Notice of Default to Tembusu Industries Pte Ltd (7^th November 2017)

• Tembusu Industries Pte Ltd failure to make payment of the monthly lease payable under Sale &  Purchase and Lease Agreement.

• Tembusu provided a personal guarantee of one of its director, Mr Tin Maung Kyin

• On 30^th January 2015, HEXZA had enter agreement with Tembusu which HEXZA purchase a 8MW Power Generator in Myamar of total purchase price USD 6.0 Million and Tembusu shall lease back the Equipment from HEXZA for a period of 10 years at a monthly rental of USD 130,205.

• Due to the default, HEXZA impairment loss of RM 28.54 milion in the first quarter for the financial year end 30 September 2017.

HEXZA’s Bottom line to take a hit from RM 28.5 mil provision 

• Tembusu’s failure to make payment on the monthly lease rental payable under agreement dated 30 January 2015.

• HEXZA appointed a law firm in Singapore to advise.

•  Issued letter to Tembusu founder and majority shareholder Pete Tin Muang Kyin.

• Tembusu had reschedule the payment twice.

• Would impact earning per share by 11.1 sen.

LIIHEN(7089)

Corporate Guarantee  (6 November 2017 & 9 November 2017)

• Provide RM 10,000,000 corporate guarantee to HSBC for additional import line facility granted to Favourite Design Sdn Bhd

• Provide RM 7,570,000 corporate guarantee to HSBC for additional import line facility granted to Lii Hen Furniture Sdn Bhd

• Additional loans taken by LIIHEN.

AJIYA (7609)

Memorandum of Understanding (6 November 2017)

• MOU signed with Politeknik Melaka to support, promote mutual understanding and collaboration on programme and activities based on Industrialised Building System (IBS)

• AJIYA to provide technical training to Politeknik Melaka in relation with IBS Technology.

Summary of Stock Reviews

Weekly Review – 29 October 2017 to 4 November 2017

KIMHIN(5371)

Affin Hwang Capital (3 November 2017)

Price Target : 1.73

• Australia moderate property market recover could drive higher ceramic demand
• Plan for upgrading existing plant for RM 10,000,000
• Domestic revenue share growth to 25% in 2016
• A recovery in property transaction volumes and more active secondary home market potential drive higher ceramic demand in FY 2018
• Second largest ceramic manufacturer behind White Horse by domestic revenue.
• Use RM 9.8 Million to purchase a penthouse at Melbourne Square Project
• Top 4 ceramic player

o   White Horse

o   Yi Lai

o   Seacera

o   Kim Hin

HOMERIZ (5160)

The Star (1^st November 2017)

Target Price : 1.18

• Improve cost through effective trainings for workers and continue seeking for automation opportunities.

Dividend payment (30^th October 2017)

• 2.2 sen, subject to the approval of HOMERIZ shareholders
•  Bring total dividend of 4.2 sen for the financial year end 31 August 2017.

Quarterly Report for the financial year end  31 August 2017 (30^th October 2017)

• Current year quarter had 19.2 % profit margin compared to last year 14.48 %. Cumulative quarter profit margin for these year is 21.02 % while last year profit margin is 20.42 %.
• Current year quarter effective tax rate is 19.37 % which is higher than last year quarter which is 17.31 %.  However cumulative quarter effective tax rate for these year is 21.05 % which is lower than last year 22.51 %
• There is an increase of company asset in term of property plant and equipment  by 10.02 %, inventories by 23.92 %, trade and other receivable by 23.56 %, and deposit, banks and cash balances by 6.60 %. These make the total asset increase by 12.40 % for the year
• HOMERIZ liability is increase by 4.26 % for the year 2016.
• HOMERIZ had net placement of RM 16,000,000 for the year 2016

LIIHEN (7089)

Hong Leong Investment Bank (30 October2017

• Price Target : 5.04
• Fire broke out in LIIHEN second premise of one of its subsidiary
• 4 out of 8 blocks production line are affected
• The lines affected are mainly old line cater for small quantity orders
• According to management the fire could affect 5 – 10 % of the November production
• In 2014, fire occurred in LIIHEN main factory and production is able to resumes in 3 days time.

Extraordinary General Meeting (1^st November 2017)

• The EGM had pass the proposal to acquisition of Domain Partners Sdn Bhd.

CHINWEL (5007)

Annual report 2017 (30 October 2017)

• Total asset for 2017 had increase by 1.77 % mainly contributed by inventories increase by16.39 % and trade receivable increase by 3.03 %. There is decrease in property, plant and equipment by 2.25 % and cash and bank balance by 14.33 
• There is increase of share capital by RM 28,162,800 due to new Companies Act 2016. No increase of number of outstanding share.
• The total liabilities had reduce by 17.45 % in 2017, which mainly contributed by other payables and accruals by 40.27 % and borrowing by 20.27%
• The profit margin had decrease from 21.10 % in 2016 to 17.60 % in 2017
• Effective tax rate had increase from 15.28 % in 2016 to 18.13 % in 2017
• There is significant increase in indirect material by 166.96 % in 2017
• Lesser inventories written off in 2017 which is RM 467,551 compared to RM 8,857,230 in 2016

Summary of Stock Reviews