Rubber Products Update

 1. COVID-19 daily new cases in Malaysia breached 2,000. New cases hit 2148 today which is 14% higher than yesterday's 1889. More importantly, it breaks the psychological level of 2000 cases. Sarawak reported the highest infections at 512.

2. This may explain the strong price performance today for gloves companies This may have increased the interest in gloves sector today. As of time of writing, six gloves stocks under our coverage have gained between 6% to 13%.

3. Our BUY calls are fundamentally driven with Kossan (TP: MYR5.45) as preferred pick Sentiment aside, our TP are already assuming long term gloves ASP of USD40 as compared to current ASP of between USD80-100. Our preferred pick is Kossan. In the near term, it should benefit from the nitrile glove shortage. 80% of its sales volume is derived from nitrile gloves, and the rest from latex gloves. Its expansion plan is intact, with Plant 19 fully commissioned in Aug 2020 – bringing total capacity to 32bn ppa. Looking ahead into FY21, the company plans to increase capacity by 1.5bn ppa by constructing Plant 20. This is slated for full commissioning by 1H21.

4. Other BUY calls are Top Glove (TP: MYR6.80), Supermax (TP: MYR8.75), Comfort Gloves (TP: MYR:2.60) and Rubberex (TP: MYR1.60).

RHB Research

Pump and Dump

 

Construction

Mah Sing

 ♦️ The development of the glove production lines are on track. Management said the first performance testing was already done on 17/3, and production should start by mid-April.   

♦️ Mah Sing has already locked in shipment up to June @ $115/1k pieces. First batch of shipment is to the US, Canada and Middle East, followed by Europe, Japan, China and South America. 

♦️ Management has already hired 60 non-factory staff (for the glove office), and is in the process of interviewing/hiring another 40 staff. The company will need 350 workers for the total 12 production lines, and thus far, it has locked in 100 workers through 4 agencies. Glove packing will be outsourced to packing professional firm in order to reduce the amount of fixed costs. 

♦️ Mah Sing has also locked in the supply of raw mat NBR @ US$2.7-3k per tonne, sufficient for the current order up to June. It has also locked in the supply until year end, but has not locked in the prices, as NBR prices are expected to come down based on feedback from NBR suppliers. Management indicated that the cost per box (1k pieces) is estimated at US$40.

♦️ Management is still confident to achieve its RM1.6bn sales target. To recall, Jan-Feb sales were already at RM250m. About RM2.4bn worth of projects will be launched this year.

♦️ Maintain Buy, TP: RM0.97

Top Glove

Top Glove (RM5.18, noon closing) by HG Tan

2Q core PAThAMI of RM2.865.1bn (+20.7% QoQ, +25x YoY ) brought 1HFY21 core PATAMI to RM5.220.9bn (22x YoY). 

Analysts will say it is is in line as their full yr forecasts are around RM10 to 10.5bn (see Edge Daily today, pg 9). 

Personally, believe results are aboved given the lead time taken to deliver earnings. Estimate full yr net profit to be closer to RM12bn in FY21

Declared DPS of 25.2 sen (1Q21: 16.5sen), ex on 23 March. 1HFY21: 41.7 sen., 1HFY20: None. 

GHW maintains Buy call with TP of RM8.06

There will be a Zoom meeting in afternoon. Analyst will issue report later

For Top Glove, given the dented sentiments with volatile share prices and investors attention on economuc recovery stocks, believe analysts' esply the brokers analysts (including our analyst) will hesitate in revising up earnings and TPs.

Personally believe analysts will remain behind the curve on earnings forecasts of Top Glove 🤣

Top Glove Result

1. Earnings matched expectations. 1HFY21 earnings of MYR5.23bn makes up 51% of consensus and 49% of our full year estimates. 1HFY21 earnings surged 23x YoY due to better ASPs and higher volume of gloves sold.

2. 2QFY21 earnings improved 21% QoQ. Higher ASP supported the increase in better earnings.

3. Announced 25.2 sen dividend. Top Glove paid 70% of its profit in 2QFY21 as promised. Recall that the Company has pledged to increase its payout ratio to 70% from 50% for FY21 beginning 2QFY21 onwards.

4. Prospects. Top Glove stated that "Global glove demand is estimated to grow from a pre-pandemic level of about 10% per annum to about 15% per annum post-pandemic, following increase in usage coupled with heightened hygiene awareness. To ensure it remains well-positioned to meet the continued strong glove demand, the Group will continue to pursue organic expansion, inorganic expansion and strategic investments.

RHB Research

Comments on Top Glove results by HG Tan :

As per my watsapp yestetday, personally construed TG's, 1HFY21 results to be aboved expectations as management guided that 2H is better than 1H.

With locked in sales and normalisation in production (2Q disrupted by closure of factories), expect earnings to trend higher in 3Q.

Personally estimate full yr FY21 earnings to come closer to RM12bn versus consensus/GHW's projection of RM10 to 10.5bn.

Expect FY22 earnings to ease but probably not as sharp as 50% reduction as anticipated by GHW/consensus given the lead time in delivering earnings

Believe our analyst Gan Huan Wen is reluctant to revise up FY21 earnings as it may translate into higher TP.. As it is, he has previously revised down TP following the sharp fall in mkt price of TG...

Judging from the reply of Tan Sri Lim when asked whether the group will continue to pay 70% of net profit as dividend in FY22, the reply alluding to positive rather than negative.. As such, can expect another high dividend year in FY22.

Believe the commendable dividends will cushion share prices. 

Meanwhile, funds raise via dual primary listing of TG in HK will further strengthen its war chest enriched by the strong cashflows. This will enhance its competitive edge in pursuing M&A when opportunities arise.

Corporate News

 •* AMMB Holdings Bhd’s* net profit for the third quarter ended Dec 31, 2020 (3QFY21) fell 30.96% to RM263.83 million from RM382.15 million a year ago, due to higher allowance for impairment on loans, advances and financing. The banking group’s quarterly revenue also slipped 11.81% to RM2.09 billion, from RM2.37 billion a year ago, its filing to Bursa Malaysia showed. AMMB did not declare any dividend for the latest quarter.

•* HeiTech Padu Bhd* has won a RM33.92 million contract to provide maintenance services for the Malaysian Immigration System (myIMMs). The technology services provider said it signed the three-year contract with the Immigration Department on March 1. The contract period started on Feb 18.

•* Pharmaniaga Bhd* has appointed Datuk Seri Mohamed Shazalli Ramly as the non-independent non-executive chairman of Pharmaniaga Bhd effective March 1, 2021. Meanwhile, Boustead's executive director of group business development Izaddeen Daud has also joined the board of Pharmaniaga as a non-independent and non-executive director.

•* Top Glove Corp Bhd’s* executive chairman Tan Sri Dr Lim Wee Chai has purchased more shares of the group, as the counter fell to an eight-month low. Lim has raised his direct shareholding in the group to 26.419% or 2.11 billion shares, after he acquired 4.04 million shares at RM4.9287 each, Top Glove’s filing with Bursa Malaysia today showed.  Lim also has an indirect stake of 8.651% or 692.19 million shares in Top Glove, the group said.

•* Advancecon Holdings Bhd* said its 30%-owned Advancecon Sarawak Sdn Bhd had bagged its single-largest contract worth RM153.5 million to undertake earthworks in the Samalaju Industrial Park, Bintulu, Sarawak. The contract was awarded by Wenan Steel (Malaysia) Sdn Bhd to Advancecon Sarawak. Wenan is building an iron and steel production complex there. Advancecon said the contract is in addition to the group’s ongoing works in Sarawak, namely two packages for Pan Borneo Highway Sarawak and two roadwork contracts from the Upper Rajang Development Agency (URDA).

•* Sime Darby Plantation Bhd* has established an Expert Stakeholder Human Rights Assessment Commission, and appointed Impactt Ltd as a third-party assessor to conduct a comprehensive evaluation of the group’s labour practices across its Malaysian operations. For the stakeholder panel, the group said its members include Shift (the leading centre of expertise on the UN Guiding Principles on Business and Human Rights), migrant worker rights activist and human rights researcher Andy Hall, and a representative of the National Union of Plantation Workers (NUPW).

•* Uzma Bhd* is acquiring stakes in two renewable energy (RE) companies for RM5.39 million, in a bid to enter the RE sector with a primary focus on solar energy. Uzma said it has entered into a conditional share sale agreement with Mohd Syahrul Nizar Abdul Ghani to acquire a 49% stake in Suria Infiniti Sdn Bhd and a 100% stake in Mahendran Surya Innovations Sdn Bhd. The oil and gas services group has mulled entering the RE space since late 2019, eyeing projects under Large Scale Solar 4 (LSS4) that were opened for bidding late last year, as well as opportunities amid the high portion of NEM quota that was not utilised.

Company Update

Top Glove Corporation Berhad (7113)

Target Price: RM7.80 (Buy)

Top Glove announced that the dual primary listing exercise on the Main Board of The Stock Exchange of Hong Kong Limited involved the issuance of up to 1.495bn new shares, representing up to 18.65% of the group’s issued shares. As such, this exercise could raise up to RM7.7bn, at an issue price to be determined at a later date. The proposals are expected to be completed by 2Q21. We estimate EPS dilution of circa-15% in FY21 post completion of dual-listing exercise. Maintain earnings forecast pending completion of this exercise. Maintain Buy.          

Via CLSA

* Malaysia - Top Glove - Trifecta listing 

Top Glove proposed to issue up to 1,495m new shares (18.7% of share base) for its upcoming listing on the Hong Kong Exchange (HKEX), which could raise up to HK$14.95bn, or RM7.77bn, for the group. The proposal targets completion by 2Q21. The issuance is surprisingly large to us, which we see as unnecessarily dilutive as most of the proposed initiatives could have been funded internally. We incorporate the impact of the dilution into our forecast, resulting in a cut in our target price from RM7.20 to RM5.50 and a downgrade of our rating from BUY to Underperform. 

* Malaysia - Malaysia Banks - Bank 4Q20 wrap 

Malaysia’s four banks, CIMB, RHB, HLBK and Alliance, reported results last Friday. HLBK was the best, while CIMB’s earnings missed on non-loan impairments. All four banks upped their provision guidance (versus last quarter), despite indicating underlying portfolios had not seen significant growth in loans requiring help. On balance, banks envisage scope for NIM expansion this year given funding mix improvement. Our top pick is Maybank (previously RHB) on higher dividend conviction. AMMB, which just agreed to a fine by the Ministry of Finance AMMB - O-PF (Making final AMM-ends) reports its quarterly results Monday. 

* Malaysia - Malaysia Utilities - Looking attractive 

Demand for electricity and gas continued to recover in 4Q20 after disruptions caused by Covid-19 in 1H20. On top of this, the government continued to honour the Regulated Asset Base (RAB) regime for Tenaga and Gas Malaysia, which naturally protects earnings from volatility and hence ensures more sustainable dividends. We continue to have BUY ratings on both given undemanding valuations & attractive dividend yields. We rate Petronas Gas O-PF, also supported by its dividend yield. 

* Malaysia - IHH - Coming out stronger from Covid-19 

IHH’s 4Q20 Ebitda of RM1,042m (+25% QoQ/+16% YoY) rebound strongly as more cost containment efforts trickled through during the quarter. This led to FY20 core PATAMI of RM715m (-22% YoY), exceeding our/consensus forecasts at 157%/248%. IHH’s share price has declined 8% YTD and it remains a more unassuming play for border reopening, in our view. Should the group sustain its 4Q20 momentum coupled with continued cost efficiency, the stock is trading at an undemanding 13x 22CL EV/Ebitda, below -1 std. of its mean. Thus, we upgrade our recommendation from Outperform to BUY on a higher target price of RM6.60 (previously RM6.30). 

* Malaysia - Maxis - Uncertainty prevails 

Maxis’ 2020 earnings (-8% YoY) were within expectations. Although guidance continued to be withheld, we take our cue from Digi, in that it sees 2021 mobile service revenue declining in the low-to-mid-single digits. On a lower post-paid Apru, we lower our earnings estimates 6%-7%. As its 4Q20 dividend of 5 sen includes a 1 sen special dividend, we believe its quarterly dividend is likely to remain at 4 sen for the near future, for an implied dividend yield of 3.4%. We retain our SELL rating at a lower target price of RM4.55 (previously RM4.70). 

* Malaysia - Malaysia Airports - Clearer recovery runway 

Malaysia Airports’ (MAHB) core loss (excluding impairment and accelerated depreciation) of RM589m was below our RM500m loss estimate. Even so, front-loading costs & depreciation in FY20 should allow a clearer P&L recovery runway, and cashflow concern has been further allayed with rescheduling obligations/debt. Cost savings exceeded its target and on the assumption that these could sustain somewhat after a recovery, and benefiting such a stronger margin, underpins the lift in our target price from RM5.60 to RM6.90 and rating from Underperform to Outperform. 

* Malaysia - AMMB - Making final AMM-ends 

AMMB (AMM MK) revealed a negative surprise Friday with it agreeing to a fine of RM2.83bn to the Ministry of Finance following a review by relevant authorities of past dealings by 1Malaysia Development Berhad (1MDB) and related entities. While more explanation may be forthcoming (likely in conjunction with its 3QFY21 results to be announced Monday), the finalised penalty necessitates us to adjust our book value estimate. This results in a 13% lower target price of RM3.50 (previously RM4.00). Our valuation multiple of 0.6x and O-PF rating remain unchanged. The silver lining from this is that there could be a greater focus on the business and fewer distractions should it consider M&As in the future. 

* Malaysia - Pentamaster - Back to the old ways 

An uptick in the book-to-bill ratio to 1.2x reinforces expectations of a return to 21CL earnings growth (+27% YoY). We expect next generation sensors to drive demand for electro-optical equipment. Adoption of silicon carbide (SiC) power semiconductors continues to rise and now forms 20% of automotive revenues. Its expansion into manufacturing of medical devices is on track and will play a meaningful role in 2022. Retain O-PF at an unchanged target price of RM7.40. 

* Malaysia - Sime Darby Property - Stronger targets ahead 

Sime Darby Property’s 2021 sales target of RM2.4bn (+20% YoY) will be supported by planned launches of RM2.5bn (+67% YoY) and unsold GDV of RM2.2bn (completed inventory comprises RM738m). Nonetheless, we take this opportunity to tweak our earnings to reflect the delay in completion of Battersea Power Station (BPS) phase 3A (£879m gross development value) that has been pushed back to 4Q21/1Q22 (initially expected for 3Q21) alongside lower margin assumptions. We reiterate BUY and an unchanged target price of RM0.69.

Top Glove - Embracing for longer term growth

(by HGTan) 

On first glance of proposal, the issue surfaced is EPS and in turn divided per share will be diluted given issuance of new shares for the HK IPO. 

Believe this perception may lead to investors further trimming down holding given the jittery mood on glove sector outlook as a whole. 

My take is this move is timely given supernormal profits years in FY21 and FY22

The 15 to 18% of new shares due to new IPO will chip off existing EPS and dividends per share but investors may not hv inclination yet on how high are the earnings to be reported in FY21/22.

With such super normal profits kicking in and in turn super high dividend per share over next two FYs, one can only celebrate for the dividends (akan datang !!) 

With this move of dual listing and new inflows of funds, the group is well equip to scale new highs. 

Share below on the rationale for the Proposed Dual Primary Listing

(summarised by TG management) :

1.  HKEX platform allows Top Glove to broaden investor reach/base and allows direct participation from new private and institutional investors in Hong Kong and North Asia. This serves to strengthen liquidity of Top Glove's share trading and to enhance stakeholders' long term value.

 2.   To provide additional financing flexibility and a new platform for future fund raising to finance potential M & A exercises for accretive earnings. This will enhance the visibility of Top Glove's profile among international funds/investors, banks, customers, suppliers, research analysts and media, resulting in stronger brand awareness for Top Glove.

3. The stronger profits moving forward will improve EPS. The proceeds to be raised from the HK IPO will be used for expansion activities to further increase the production capacity and strategic business expansion for better sustainable profits. As the company is going through an exceptional high profit period, the EPS dilution effect is mitigated.

4.  The exceptional high profit with the special dividend of 70% from Q2 to Q4 FY2021 will provide shareholders with higher dividend compare with previous years, and mitigate the EPS dilution effect.

5. The funds raised and the current cash holding will be a strong reserve to fund Top Glove's ongoing growth and strategic expansion after the period of abnormal profits. With this, the group is hopeful that the existing shareholders can continue to enjoy a sustainable good dividend moving forward where the existing shareholders currently enjoys.

6. HKEX as a regulator in addition to Bursa and SGX would upgrade Top Glove's corporate governance standards in Top Glove's journey towards Fortune Global 500.

Separately, TG will release 2QFY21 results on 9 March afternoon. Believe it will be a commendable set of numbers.

Both our anakyst Gan Huan Wen and mkt consensus estimate net profit around RM10.5bn in FY21 with a 50% drop off in FY22. 

Believe TG wld be able to exceed these expectations and deliver earnings surprises again!!

In the way, the new HK IPO addresses concerns of earnings sustainability beyond FY22 as the group builds up its war chest and ready to cherry pick earnings accretive ventures. This will at least mitigate earnings down cycle risks beyond FY23.

As per my previous watsapp, believe value emerging at current level of RM5

Corporate News

PCHEM (Neutral↔;TP↑MYR8.35@10x FY21 EV/EBITDA). FY20 results beat expectations on better than expected margins. FY20 DPS at 12sen (vs FY19’s 18sen). 

♦️4Q20 core profit +4x QoQ on stronger EBITDA (led by higher ASPs and widened margins) amdist higher sales volume and plant utilisation at 94%, from 90% in 3Q20). 

♦️ FY20 core earnings -31% YoY on ASPs and margin weakness with 4% lower sales volume.

♦️ PIC is further delayed to 2H21 due to COVID-19 disruption Management guided 80% plan utilisation to achieve P&L breakeven under current spread. We expect PIC to incur minimal losses as only EBITDA positive to be achieved in 2H21. 

♦️ 1Q21 could be stronger as major product ASPs continue to extend. Increase FY21F-22E by 2-5% but we have factored in relatively weaker price trend in 2H21 in view of industry capacity additions.

♦️ Upgrade to BUY with higher TP of MYR8.35 pegging to 10x FY21 EV/EBITDA, riding on strong earnings rebound this year.

•* Telekom Malaysia Bhd (TM)* returned to the black in the fourth quarter ended Dec 31, 2020 (4QFY20) registering a net profit of RM259.44 million from a net loss of RM51.09 million recorded a year earlier due to lower operating costs and net other gains, the telco said. The improvement in its bottom line was despite the fact that TM saw its revenue fall slightly by 1.1% to RM3 billion from RM3.03 billion a year earlier, underpinned by lower revenue in its voice, data and non telecommunication services. Its earnings per share (EPS) jumped to 6.87 sen in the quarter from 1.37 sen a year earlier. TM also declared a final interim single-tier cash dividend of 7.5 sen, to be paid on March 31. For the full year, TM has proposed 14.3 sen for FY20 versus 10 sen in FY19. For its full-year earnings in FY20, the telco reported a decline in revenue of 5.2% to RM10.84 billion against RM11.43 billion registered last year due to lower revenues from all lines of products. TM's full-year profit surged 61% year-on-year to RM1.02 billion in FY20, contributed partly by lower tax charges as well as contribution from the group's share of improved performance of subsidiaries with non-controlling interests. TM also will be investing between 14% and 18% of its annual revenue for the financial year ending Dec 31, 2021 (FY21) for capital expenditure (capex) purposes, said its chief executive officer Imri Mokhtar.

•* VSTECS Bhd’s* net profit for the fourth quarter ended Dec 31, 2020 (4QFY20) grew almost 20% to RM12.87 million — the highest quarterly net profit on record, compared with RM10.74 million last year driven by the new normal of working and learning from home. Earnings per share rose to 7.2 sen from six sen. Quarterly earnings also jumped 21.7% to RM659.63 million from RM542.1 million in 4QFY19. The company declared a second interim dividend of 4.5 sen per share in respect of the financial year ended Dec 31, 2020 (FY20), payable on May 21. For the full year of FY20, it posted a record high net profit of RM36.78 million, 24.3% higher, from RM29.59 million last year. Annual revenue hit an all-time high of RM2.02 billion, up 11.9% from RM1.8 billion.

•* Vitrox Corp Bhd’s* net profit for the fourth quarter ended Dec 31, 2020 (4QFY20) jumped 79.4% to RM31.92 million from RM17.79 million a year earlier on the back of higher revenue. Earnings per share rose 6.77 sen from 3.78 sen previously. Quarterly revenue climbed 68.03% to RM159.8 million from RM95.1 million a year ago mainly driven by the tremendous increase in demand from Machine Vision System (MVS) and Automated Board Inspection (ABI). For the full year ended Dec 31, 2020 (FY20), net profit increased 32.6% to RM105.62 million from RM79.65 million. Revenue climbed 38.51% to RM470.38 million from RM339.59 million due to higher volume demands from MVS and ABI.

•* D&O Green Technologies Bhd’s* net profit surged 119% to RM30.32 million for the fourth quarter ended Dec 31, 2020, from RM13.85 million in the previous year’s corresponding quarter, benefiting from increased demand and recovery in the automotive industry. The automotive LED maker’s revenue for the quarter grew 39% to RM209.57 million from RM150.47 million a year earlier. For the full year, D&O said its net profit rose 42% to RM49.65 million from RM34.87 million in the preceding year, while revenue climbed 14% to RM575.78 million from RM504.31 million.

•* Rubberex Corp Bhd* posted a fourth quarter ended Dec 31, 2020 net profit of RM59.44 million — 15 times the RM3.88 million it made in the corresponding quarter a year ago — which is its highest quarterly net profit on record. The jump in the rubber glove makers' earnings was due to higher average glove selling prices amid higher demand. Revenue for the quarter surged 203.8% to RM152.83 million from RM50.31 million previously. The group's annual net profit also swelled to its highest of RM131.18 million for FY20, 11.6 times the RM11.35 million it posted in FY19, as annual revenue about doubled to RM416.39 million from RM218.64 million.

•* Allianz Malaysia Bhd’s* net profit for the financial year ended Dec 31, 2020 (FY20) rose to RM520.32 million compared with RM492.48 million in FY19. Revenue also increased to RM5.95 billion from RM5.53 billion previously, due mainly to higher gross earned premiums and investment income by RM384.8 million and RM26.5 million respectively. As for the fourth quarter ended Dec 31, 2020, net profit was higher at RM144.03 million compared with RM133.08 million, while revenue increased to RM1.53 billion from RM1.41 billion in the same quarter in 2019.

•* Press Metal Aluminium Holdings Bhd* posted a net profit of RM142.6 million for the fourth quarter ended Dec 31, 2020 on higher aluminium prices, up 6% from RM134.47 million recorded a year ago. Quarterly revenue, however, slipped 3.69% to RM2.12 billion from RM2.2 billion due to the lower extrusion products sales, according to a bourse filing today. Its earnings per share rose slightly to 3.53 sen from 3.33 sen in 4QFY19. The group declared a fourth interim single-tier dividend of 1.25 sen per share to be paid on March 31, 2020. This brings total dividends for FY20 to 4.25 sen translating to a pay-out ratio of 37.5%. For the full year ended Dec 31, 2020 (FY20), net profit declined to RM457.2 million from RM474 million a year earlier. Revenue fell 14.4% to RM7.54 billion from RM8.8 billion due to softer aluminium prices in the first half of 2020 during the height of the pandemic.

•* Inari Amertron Bhd* posted its best-ever quarterly net profit of RM90.1 million in the second quarter ended Dec 31, 2020 (2QFY21), about 2.4 times the RM37.49 million it made last year, driven by stronger sales volume generated by its radio frequency (RF) business. Quarterly revenue grew by 42% to RM376.83 million from RM265.44 million previously. Earnings per share rose to 2.74 sen from 1.18 sen. The group declared a second interim dividend of 2.5 sen per share in respect of the financial year ending June 30, 2021 (FY21), payable on April 8. For the first six months of FY21, Inari Amertron's net profit jumped 88% to RM160.17 million from RM85.22 million last year, while revenue climbed 24.5% to RM724.45 million from RM582.04 million.

•* AEON Co (M) Bhd’s* net profit for the financial year ended Dec 31, 2020, fell to RM41.42 million from RM109.229 million registered last year. Revenue also declined 10.7% to RM4.05 billion from RM4.54 billion previously, due to lower revenue from the retailing segment and property management services by RM387.6 million and RM100 million respectively, it said. AEON said revenue from its retail segment was affected by lower non-essential category sales, namely hard-line and soft-line products as a result of the Covid-19 pandemic and Movement Control Order (MCO), as well as other related restrictions since March 18, 2020, whereby general merchandise and specialty stores were not allowed to operate for almost two months during the period under review.

•* Genting Plantations Bhd’s* net profit grew by 28.1% to RM79.04 million in the fourth quarter ended Dec 31, 2020 from RM61.69 million a year earlier, due to stronger palm products prices. Earnings per share rose to 8.81 sen from 6.88 sen. Quarterly revenue rose 14.9% to RM739.25 million from RM643.59 million, the group said. The group has declared a final dividend of four sen per share payable on a date to be fixed later as well as a special dividend of 11 sen per share to be paid on March 30. For the full year, Genting Plantations said its net profit grew 79% to RM254.36 million from RM142.07 million in 2019, while revenue was up 10.2% to RM2.5 billion from RM2.27 billion.

•* Parkson Holdings Bhd* has narrowed its net loss to RM28.27 million or 2.65 sen per share in the second quarter ended Dec 31, 2020 from RM81.08 million or 7.6 sen per share last year, mainly thanks to better operating profits from its China operations. Quarterly revenue was down 11.1% to RM877.77 million from RM987.41 million. For the cumulative six months ended Dec 31, its net loss also shrank to RM50 million, from RM125.7 million last year, while revenue slipped 9.9% to RM1.69 billion from RM1.87 billion.

•* DRB-Hicom Bhd* has reported a surge in net profit to RM985.99 million for the fourth quarter ended Dec 31, 2020 (4QFY20), from RM47.5 million in the preceding quarter, fuelled by higher contributions from its automotive and properties segments. The diversified group posted a record-high quarterly revenue of RM4.85 billion, versus RM3.56 billion in the preceding quarter underpinned by completion of the disposals of property assets and investments by the group and higher sales of vehicles and components by Proton. For the financial year ended Dec 31, 2020 (FY20), DRB-Hicom registered pre-tax profit of RM540.1 million on the back of revenue of RM13.16 billion, thanks to moderate business recovery in the second half of 2020 and the completion of an asset disposal exercise.

•* Hap Seng Plantations Holdings Bhd* saw its net profit in the fourth quarter ended Dec 31, 2020  increase by 47% quarter-on-quarter to RM36.95 million from RM25.08 million. The planter said a combination of higher commodity prices and sales volume led to the increase. Earnings per share rose to 4.62 sen from 3.14 sen previously. The planter declared a second interim dividend of 5.5 sen per share, payable on March 24. In contrast, it declared a two sen dividend in 4QFY19. This brings total dividends declared for FY20 to seven sen per share from 2.5 sen in FY19. Hap Seng Plantations' revenue was up 19% at RM153.27 million from RM128.9 million in 3QFY20. On a year-on-year (y-o-y) basis, the group saw its net profit rise 19% from RM31.17 million, while its revenue was up 23% from RM124.86 million. Earnings per share rose from 3.9 sen in 4QFY19. Its latest quarterly net profit brings its FY20 net profit to RM90.3 million, up 187% from RM31.45 million in FY19. Full-year revenue was 12% higher y-o-y at RM467.6 million compared with RM418.6 million.

•* Globetronics Technology Bhd’s* net profit for the fourth quarter ended Dec 31, 2020 rose 15.97% to RM16.86 million from RM14.54 million a year ago on higher revenue. Its quarterly revenue was also up, growing 7.11% to RM63.15 million from RM58.96 million a year ago. The group has declared a second interim single tier ordinary dividend of 1 sen per share and a single tier special dividend of 1.5 sen per share, totalling RM16.7 million in respect of the financial year ended 31 December 2020, that was paid on 3 December 2020. The group said the higher revenue and net profit achieved in the current year were mainly due to higher volume loadings and better economy of scale achieved from certain of the group's customers. For the full year ended December 31, 2020, the group’s net profit increased by 13.62% to RM50.8 million from RM44.71 million a year earlier, as its yearly revenue rose 5.18% to RM227.52 million from RM216.32 million a year earlier.

•* Dayang Enterprise Holdings Bhd’s* net profit for the fourth quarter ended Dec 31, 2020 slumped 83.17% to RM13.17 million from RM78.23 million a year ago, dragged by slower work orders due to the pandemic. Revenue fell 44.49% to RM158.23 million from RM285.02 million mainly attributable to lower vessel utilisation at 44%, as compared with 76% in the previous corresponding quarter. For the full year ended Dec 31, 2020, the group’s net profit plunged 75.07% to RM57.59 million from RM230.95 million in the previous year, as revenue slipped 30.08% to RM731.44 million from RM1.05 billion.

•* Datasonic Group Bhd* saw its net profit for the third quarter ended Dec 31, 2020 slump to RM627,000 from RM20.18 million in the corresponding quarter last financial year following lower demand for its passport, consumables and personalisation services. Quarterly revenue also shrank by 61% y-o-y to RM29.45 million from RM74.97 million a year prior. For the cumulative nine months ended Dec 31, 2020, its net profit declined by 73% y-o-y to RM12.93 million, from RM48.05 million in the corresponding nine months of the previous financial year. Meanwhile, 9MFY21 revenue declined by 43% y-o-y to RM112.59 million from RM196.83 million a year prior. The group also announced that it has appointed Wan Zalizan Wan Jusoh as its new managing director replacing Datuk Razali Mohd Yusof, who has been redesignated as a non-independent and non-executive director. Meanwhile, Safian Mohd Yunus has been appointed as Razali's alternate director, while Handrianov Putra Abu Hanifah has resigned from his post as executive director to pursue other interests.

•* UOA Development Bhd's* net profit for the fourth quarter ended Dec 31, 2020 slumped 68.95% to RM34.96 million from RM112.61 million a year ago, due to lower recognition from ongoing projects and a fair value loss from the revaluation of its investment properties. Its quarterly revenue also fell 14.5% to RM194.11 million from RM227.02 million a year ago.  The group has recommended a first and final single-tier dividend of 14 sen and a proposed special dividend of one sen for the financial year ended Dec 31, 2020, utilising proceeds from the disposal of UOA Corporate Tower. For the full FY20, the group's net profit slipped 2.05% to RM391.29 million from RM399.47 million a year earlier, as its revenue declined by 23.53% to RM844.6 million from RM1.1 billion.

•Steel products and equipment maker Prestar Resources Bhd’ net profit for the fourth quarter ended Dec 31, 2020 jumped to RM15.76 million, five times the RM3.12 million it made in the corresponding quarter a year earlier, driven by strong demand and higher selling prices of its products. Quarterly revenue grew 22.6% to RM137.05 million from RM111.77 million. Earnings per share jumped to 8.12 sen from 1.59 sen previously. The group has proposed a final dividend of 1 sen per share, amounting to RM1.94 million, subject to shareholders' approval. The strong 4QFY20 lifted the group's annual profit for FY20 to RM22.17 million, four times the RM5.53 million it recorded in FY19. This came despite annual revenue slipping 9.73% to RM409.98 million from RM454.17 million, following sales slowdown in April and May due to MCO restrictions, and the reimposition of the conditional MCO towards the end of 2020.

•* Tek Seng Holdings Bhd* returned to the black with a net profit of RM8.16 million for the fourth quarter ended Dec 31, 2020 , from a net loss of RM12.94 million a year ago, underpinned by higher profit in its polyvinyl chloride (PVC) segment. The group's quarterly revenue rose 14.27% to RM48.52 million from RM42.46 million. It proposed a final dividend of 0.5 sen for FY20. For FY20, the group made a net profit of RM27.41 million compared to a net loss of RM16.25 million a year earlier, as revenue grew 10.71% to RM191.09 million from RM172.6 million

•Property development and realty outfit Majuperak Holdings Bhd aims to raise up to RM20 million via a proposed private placement. The group said the funds are to support its operating expenditure, repay bank borrowings and fund upcoming projects. Majuperak said it plans to issue up to 56.66 million in new shares, representing not more than 20% of its total number of issued shares. It said of the total proceeds expected to be raised, RM7 million has been earmarked for a facility management project involving the provision of clinical support service for four Ministry of Health clinics in Terengganu in addition to the 10 clinics already serviced by the group. Meanwhile, RM11.46 million will be allocated for administrative and operating expenditure to sustain its operations for the year ahead. Additionally, RM2 million will be utilised for the settlement of existing overdraft facilities.

•* AirAsia Group Bhd* said the budget airline has recognised a loss of US$74.11 million (RM299.34 million) in the second half of 2020, as a result of 33%-owned associate AirAsia Japan Co Ltd’s (AAJ) bankruptcy proceedings due to the impact of the Covid-19 pandemic. The group said AAJ has commenced its bankruptcy proceedings as ordered by the court today. The company also incurred US$5.18 million in the fourth quarter of 2020 and first quarter of 2021 for expenses related to the aircraft de-registration to move three aircraft from Japan to Malaysia.

•* Destini Bhd* has entered into an agreement with Keretapi Tanah Melayu Bhd (KTMB) to establish a joint-venture (JV) company, ET Sdn Bhd (ETSB) to expand its capabilities in maintenance, repair and overhaul (MRO) services in the rail sector. Destini said both parties have inked a subscription, JV, and shareholders agreement that will see Destini acquiring a 70% stake in ETSB, an indirect wholly-owned subsidiary of KTMB, through its 100%-owned subsidiary, Destini Rail Sdn Bhd. The remaining 30% shareholding will be held by KTMB, through its wholly-owned subsidiary KTMB Technics Sdn Bhd.

•* LKL International Bhd* has announced that its subsidiary LKLAdvance Metaltech Sdn Bhd has secured exclusive distributorship rights for Singapore-based iWOWTechnology Pte Ltd’s trace token nationwide and targets Selangor to be the first State in Malaysia to adopt the device. LKL said the group will market, sell and distribute trace tokens to assist Selangor's efforts in containing the spread of the Covid-19 virus, particularly in hotspots such as workplaces, factories and construction sites. The exclusive distributorship agreement has been signed for an initial duration of two years and renewable thereafter upon future consensus between both LKL and iWOW Technology.

Pumps and Dumps and Chumps

 By Paul Krugman

In a more reasonable world, hardly anyone would care about the ups and downs of a smallish retailer’s stock price. Even near the top of its Reddit-fueled roller coaster, GameStop accounted for only about 0.06 percent of the total value of U.S. stocks. Furthermore, the stock market itself is mainly a sideshow to the real economy.

But we don’t live in a reasonable world, we live in a world where the GameStop story briefly commanded global attention. And the craziness did offer some important lessons — not so much about economics and markets as about psychology and politics.

For it turns out that despite four years of Donald Trump, our society remains remarkably gullible. And it is not just members of the public who believe what they see on social media; far too many influential people still keep falling for fake populism.

The story so far: GameStop is a chain of stores selling video games and other electronic goods. With the rise of online gaming the company’s underlying business has been in gradual decline. Recently some hedge funds, which believed that this decline wasn’t fully reflected in its stock price, began selling the stock short — that is, borrowing stocks and selling them, expecting to buy the stocks back at lower prices.

Enter Reddit, an online discussion site. WallStreetBets, a “subreddit” (discussion board) that caters to small, risk-taking investors, has become a force in the market: Stocks promoted on the board, so-called meme stocks, sometimes soar. And that’s what happened to GameStop.

In fact, GameStop surged so much that the short-sellers were forced to fold their cards. The rising stock price meant that they were losing money, and to limit their losses they had to unwind their positions — which meant buying the stock back, which sent its price even higher.

That was last week. This week GameStop’s stock price has come mostly, although not entirely, back down to earth. And now, instead of reading about little guys who suddenly became rich, we’re reading about small investors who bought near the top and lost their life savings.

So what was all that about? Social media acted as an accelerant, but the basic story of what happened is a very old one. This was basically a pump and dump, with a side order of predatory trading.

A pump and dump takes place when an investor or group of investors buy a stock cheaply, then drive its price up by spreading rumors and/or misinformation, letting them unload their shares on naïve chumps — “bag holders” — at a profit. In principle that’s an illegal practice, but it’s unlikely that anyone will end up being charged in the GameStop affair, since it will probably be impossible to prove intent.

Still, the stock did in fact get pumped — we don’t know who exactly pushed GameStop, but many WallStreetBets posts are reportedly coming from bots, not actual human beings — and somebody made a lot of money selling it to bag holders.

Predatory trading is wheeling and dealing that exploits the limited financial resources of other traders, forcing them to unwind their positions and reinforce price moves. We normally think of hedge funds as the predators in such situations; the most famous example may be George Soros’s play against the British pound in 1992. But last week some of the hedge funds were the prey.

All in all, it’s a nasty story with no obvious good guys. Who’s going to shed tears for short-sellers? But it’s also, in financial terms, small potatoes. What’s distressing about the GameStop saga isn’t the fact that some people lost money; it is, as I said, the continuing gullibility these events exposed.

Let’s be clear: What just happened was not a populist uprising. Our economy has left many families behind, but what working Americans need is an end to wage stagnation, not the opportunity to gamble on stocks. Indeed, when the dust settles we’ll probably find out that small investors as a group lost money in the trading frenzy, while Wall Street gained.

But the narrative of little guys taking on The System surely sucked in some unwary victims. And things turned really ugly once GameStop stock began its inevitable descent.

When the trading platform Robinhood temporarily stopped accepting orders for some volatile stocks because it didn’t have enough cash to support the trades, far too many public figures immediately claimed conspiracy. It’s no surprise that Senator Josh Hawley, arguably America’s leading fake populist and a fist-pumping promoter of the election lies that led to the sacking of the Capitol, joined in. But some progressives echoed the complaint.

They should have known better. There was always an obvious QAnonish tinge to the meme stock phenomenon, and it has gotten ever stronger as those stocks sink; yes, there are people on Reddit and other social media assigning all the blame to Jewish bankers.

So let me make a plea to everyone who cares about the inequalities of our society: It’s fine to support populism, but make sure that the populism is real. We need serious policies to make American lives better, not conspiracy theorizing and phony culture wars against “elites.”