The Star Online: Business

Fitters advances on venture into renewable energy sector
AmResearch maintains "Buy" on Sarawak Cable Bhd
Affin Research maintains "Buy" call on DiGi, target price RM5.39

Fitters advances on venture into renewable energy sector

Posted: 17 Jun 2013 07:08 PM PDT

Published: Tuesday June 18, 2013 MYT 10:09:00 AM

KUALA LUMPUR: Shares of Fitters Diversified rose to a high of 81 sen in early Tuesday following its venture into the renewable energy sector.

At 9.52am, Fitters rose 1.5 sen to 81 sen. There were 5.42 million shares traded at prices at prices ranging from 78.5 sen to 81 sen.

The FBM KLCI fell 5.37 points to 1,766.80. Turnover was 370.07 million shares valued at RM252.91mil. There were 195 gainers, 199 losers and 213 counters unchanged.

On Monday, Fitters announced it was venturing into the renewable energy sector by acquiring plantation land and assets for a total consideration of RM52mil.

AmResearch maintains "Buy" on Sarawak Cable Bhd

Posted: 17 Jun 2013 07:07 PM PDT

KUALA LUMPUR: AmResearch is maintaining its "Buy" call on Sarawak Cable Bhd with a fair value of RM2.50 in line with the construction of its 10MW mini-hydro plant in North Sumatra in two months.

It said cable group managing director Toh Chee Ching told The Star the project's site survey has been completed and it is in the midst of engineering design, costing RM80mil and will take 18 months to complete.

AmResearch said Toh told The Star that S Cable has secured financing from a local bank to partly-finance the project while RM20mil to RM25mil will come from internal funds.

"As the hydro plant is only expected to be completed in 2015, we expect minor contributions in the second half of FY2015F," it said.

It said shareholders yesterday gave the green light for S Cable to raise RM77.63mil from a proposed 1-for-2 rights issue where RM66.6mil from the proceeds raised will be used for working capital and capex, while RM10mil will be used to help pare down borrowings. Also approved is the proposed 1-for-5 bonus issue of 46.6mil new shares

"We view this positively as the proceeds will be used in anticipation of S Cable securing the 500kV backbone line (transmission package worth about RM1bil) to be awarded soon. As the rights issue is expected to be completed by end-Aug, we expect the award to be announced sometime then," it said.

It added the newspaper reported S Cable is tendering for a RM1bil worth of power transmission jobs in Sarawak and Peninsular Malaysia with its latest tender includes a RM30mil transmission line job in Melaka for Tenaga Nasional Bhd.

"Just last week, S Cable won a RM32.9mil job to build the proposed 132kV Tudan-Miri airport line. Other potential projects include the Tanjung Manis-Bintulu and Mambong-Kalimantan lines worth RM350mil.

"S Cable will also benefit from the state government's Rural Electrification Scheme. As at end-May, S Cable has an order book of RM687mil, with an outstanding amount of RM202mil," it said.

Affin Research maintains "Buy" call on DiGi, target price RM5.39

Posted: 17 Jun 2013 06:18 PM PDT

KUALA LUMPUR: Affin Research is maintaining is "Buy" call on DiGi.com Bhd with a lower target price of RM5.39 from RM5.76 after raising its capital expenditure assumptions to incorporate higher spending for its Long Term Evolution network within the next two years.

Affin said it remains positive on DiGi's stock will continue to gain revenue market share as it penetrates the ethnic Malays segment, suburban market and East Coast markets which are the three key growth areas for the company.

"A key catalyst to its growth will be via the expansion of its 3G footprint, which will reach more than 75% of the population by end financial year 2013 from 67% as at end financial year 2012. Simultaneously, DiGi is keeping a tab on its key stronghold the youth and migrant segments,' it said.

Affin expects DiGi to grow its revenue market share where in 1Q13, DiGi's revenue market share was 28.4%, up from 27.9% in 1Q12.

We believe that DiGi's growth in its share of revenue has been attributed to a combination of its growing migrant segment and strong youth segment. Key areas of weakness for DiGi has however been centred around the sub-urban markets, East Coast of Peninsular Malaysia, East Malaysia and the business/SME segment. Nevertheless, these areas have slowly been addressed over the last one to two years, largely explaining DiGi's continued growth in market share," it said.

It added it expects cost benefits from the DiGi-Celcom joint venture to aid margin improvement as key savings will likely materialise via its fibre network as opposed to site consolidation as expected earlier.

"Upon completion of the 5,500km fibre backbone, DiGi would be less dependent on third party suppliers of network capacity. We understand that this will add up to the bandied cost savings to the tune of RM2.2bil over a 10-year period," it said.

Kredit: www.thestar.com.my

Isnin, 17 Jun 2013