About Sime Darby,Scomi Group,Uchi Tech,Tenaga

Sime Darby




What’s Up? … dated July 2010



PNB has pared down its stake in the country’s largest conglomerate Sime Darby Bhd with the disposal of more than 47 million shares resulting in its direct interest being lowered to 13.87%.



PNB disposed of 5.5 million shares on July 9 2010 to reduce its stake in the conglomerate from 838.90 million shares or 13.96% to 833.40 million shares or 13.87%. Data services indicated that the shares were sold off-market in a number of tranches with prices ranging from RM7.69 to RM7.80 per share.



According to Sime’s July 13 filing, PNB had disposed of 19 million shares on July 7 2010 and a further eight million shares the following day to reduce its stake from 865.90 million shares or 14.41% to 838.90 million shares or 13.96%. The two blocs of shares were sold off-market at RM7.50 per share and drawing a total value of RM202.5 million.



PNB’s shareholding in Sime has gradually been reduced since early July 2010. It had disposed of over 15 million Sime shares on July 1, 2, July 5 and 6 2010.



An institutional investor could have picked up the big chunk of the shares sold by PNB as Sime remained financially strong with contributions from its plantation, industrial, property and motor sectors at satisfactory levels.



Due to provisions to the tune of RM964 million, Sime posted a net loss of RM308.63 million in its third quarter ended March 31, 2010 (3QFY10) versus a net profit of RM150.57 million a year earlier. Its net asset per share stood at RM3.49 as at March 31 2010.



Sime’s recent losses would not impact its 50% dividend payout policy.







Scomi Group



Shareholding of Scomi Group as at May 2010

Kaspadu (including indirect): 15.21%

Axa Investment: 5.35%

EPF: 0%



Shareholding of Scomi Marine as at April 2010

Scomi Group: 52.71%

LTH: 5.11%

Chuan Hup Holdings Bhd: 23.19%

Meer Sadik Habib: 5.84%



Shareholding of Scomi Engineering as at April 2010

Scomi Group: 69.31%



What’s Up? … dated July 2010



Sources say its major shareholder Kaspadu Sdn Bhd is poised to loosen its grip on or even exit from the company. In an exercise that will see a realignment of shareholding at Kaspadu level, it is learnt that Datuk Kamaluddin Badawi will cased to be a substantial shareholder in Scomi but his partner Shah Hakim will remain with the group.



This is why Kaspadu has reduced its shareholding in Scomi by more than half from a year ago (2009). It is not known who bought the shares. Sources say the shares were sold to friendly with Kaspadu. Shah and his partners are still very much in control



In 2003, Kamaluddin had a 36.25% stake in Kaspadu, Shah hakim 36.25% and Nazimah Syed Majid 27.5%. It is understood that under the realignment, Shah Hakim is keeping his interest in Kaspadu while Kamaluddin and Nazimah are selling their stakes, But it is not clear to whom Kamaluddin and Nazimah have sold their shares.



It is uncertain whether the restructuring at Kaspadu level has any link to the events that occurred more than a year ago (2009), whne Scomi came under the spotlight following reports of US sanctions against Shah hakim and several other Malaysian businessmen who were allegedly involved in nuclear proliferation. .



Also, it is believed that Kamaluddin has been keen to exit Scomi.



It is worth nothing that Kaspadu had sold its Scomi shares at 35 sen to 50 sen apiece which is at a 50% to 70% discount to Scomi’s NTA per share of RM1.05. Given the fact that Scomi is undervalued, the divestment at such prices is quite puzzling, especially by a major shareholder. Furthermore, Scomi is main beneficiary of the potential cash dividends that will be declared by its subsidiaries.



Scomi is considered undervalued based on a sum of parts valuation of its subsidiaries, Scomi’s 69.31% stake in Scomi Engineering and 42.71% in Scomi Marine are worth RM475 million. If strip out the RM475 million from current market cap, the group would only be valued at RM35.6 million.



It is worth nothing that Scomi is the largest recipient of cash from its subsidiaries that have been divesting.





Uchi Tech Bhd



What’s Up? … dated July 2010



Its European orders which comprise about 80% of total revenue, are not affected by the sovereign debt crisis in Europe.



Its customers are MNCs most from Europe.



This could possibly due to the Energy Savings Act enacted by the European countries, which was implemented from Jan 2010. The Act would leave customers with no choice but to place orders with Uchi due to lack of alternative suppliers in the market.



It posted a net profit of RM9.95 million for 1Q2010. Its net asset per share stood at 47 sen. In FY2009, the company’s revenue fell and net profit declined to RM26.95 million which was due to 2008 financial crisis.



The company is targeting a 25% to 30% growth in US dollar revenue as compared to 2009. Uchi conducts all its trades in US dollars.



It has taken advantage of its large cash pile and low stock prices to purchase its own shares, and conducted frequent share buy backs throughout July 2010. As at July 2010, the company had a total of 5.11 million treasury shares.



Its other strengths are its huge cash pile of about rm124 million as at March 31, 2010 and is zero gearing. Its net asset cash per share is 33.1 sen.



The large cash would allow Uchi to give high dividends to its shareholders in FY2010 and FY2011. Its dividend policy is to distribute a minimum of 70% of its profit after tax to its shareholders.



Going forward … It plans to diversify away from Europe. It is currently negotiating with China some business deals.



The company is also taking concrete steps to reduce its heavy dependence on the coffee machine modules division by 2010 end.



Its strong cash pile also enable it to fund capex while allocating a targeted 7% of total revenue for R&D to sped up diversification away from the coffee machine modules division.





Tenaga



Sources say The Energy Commission of Malaysia has been given the mandate to call for competitive bidding for the expansion of coal fired plants in Peninsular Malaysia.



It is leant that the regulator for the electricity and gas supply industry is in the process of preparing request proposals and other documents inviting bids for the supply of an additional 1000 MW to 2000 MW of electricity.



A committee under the Energy Commission with representatives from TNB and EPU will call for bids and determine who can give the lowest tariff for new plant up or power plants.



The Energy Commission was roped in because Tenaga will also be bidding for the expansion of its Janamanjung coal fired plant. Apart from Tenaga MMC Corp has also expressed interest in expanding its Tanjong Bin Power plant to supply additional power to the grid.



Besides Tenaga and MMC Corp, the owners and operators of gas plants are also looking to increase their supply of power to the national power grid. Among them are YTL Power and Tanjong plc.



The move to call for bids comes on the back of the need to boost reserve power margins to cope with increasing power in the peninsula.



Meanwhile, Tenaga biggest fear is that if there are too many new power plants, it would result in excess reserve margins, which will impact its bottom line. Which is why the utility is pushing for a gradual increase in capacity.



The government is also initiating discussions with the first generations IPPs on the possible extension of their services, subject to supply of natural gas from Petronas and pricing for the IPPs’ electricity.