Mega First Corp

[winston]

not vested

Mega First surges on analysts' coverage BY NADYA NGUI

KUALA LUMPUR: Shares of Mega First Corp (MFCB) surged at mid-morning on Tuesday after PublicInvest Research initiated coverage on the group, saying that it was optimistic on MFCB's prospects.

At 11.34am, the company's shares jumped 32 sen to RM2.66 with some 2.33 million shares done between the prices of RM2.50 and RM2.69.

The FBM KLCI was up 4.22 points to 1,850.56. Turnover was 1.195 billion shares valued at RM740.21mil. There were 282 gainers, 323 decliners and 343 counters unchanged.

PublicInvest in a note said it had initiated coverage on MFCB with an Outperform call and a target price of RM3.85.

"Given its steady recurring income from the power business coupled with decent earnings prospects from its resources arm, we think that MFCB’s investors today get both businesses for nearly free at current share price," it said.

PublicInvest said there was deep underlying value in the company.

"Further potential re-rating catalysts include stronger-than-expected production growth for the resources business, renewal of concession for the power business in China and Sabah and the completion of its hydropower project in Laos by 2019," it said.

Those mentioned would be the growth driver for the group in the next few years, it said.

Source: The Star

[winston]

not vested

PublicInvest Research initiates coverage on Mega First

KUALA LUMPUR: PublicInvest Research has initiated coverage on Mega First Corporation Bhd (MFCB) with an Outperform rating and a target price of RM3.85, given its steady recurring income from the power business, coupled with decent earnings prospects from its resources arm.

In a note on Tuesday, the research house said it belived that MFCB's investors today get both businesses for nearly free at current share price.

"Based on our sum-of-parts valuation, we see deep underlying value in the company.

"Further potential re-rating catalysts include stronger-than-expected production growth for the resources business, renewal of concession for the power business in China and Sabah and completion of its hydropower project in Laos by 2019, which will be the growth driver for the group in the next couple of years," it said.

Source: The Star

[winston]

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November 25, 2013

Mega First Q3 earnings up 31% to RM23m

KUALA LUMPUR: Mega First Corporation Bhd’s (MFCB) earnings rose 31.1% to RM23.09mil in the third quarter ended Sept 30, 2013 from RM17.61mil a year ago, as its benefited from higher sales of lime products and foreign exchange gain.

The company, which is involved in power generation, resources and property development, said on Monday revenue slipped 2.5% to RM148.99mil from RM152.85mil. Earnings per share were 10.36 sen compared with 7.84 sen.

MFCB said its two smaller core activities namely resources and property divisions contributed 19.4% and 18.2% to the group’s core revenue and pre-tax profit, respectively.

“Revenue from the resources division was 4.5% higher at RM21.4 million primarily due to higher sales of lime products.

“Quicklime sales increased in both local and export markets while sales of hydrated lime dropped. Pre-tax profit rose 24.9% to RM6.2 million, mainly contributed by lime products and foreign currency exchange gain from a stronger US dollar,” it said.

MFCB said revenue from the property division fell 22.0% due to the 30.6% decline in property development revenue while rental revenue from investment properties rose 7.5% on higher occupancy. Pre-tax profit fell significantly to RM180,000.

For the nine months ended Sept 30, its earnings rose 37.6% to RM61.92mil from RM44.97mil in the previous corresponding period. Revenue fell 5.2% to RM440.61mil from RM465.06mil.

MFCB said group revenue fell 5.3% to RM440.6mil. However, pre-tax profit rose 27.5% to RM115.9mil mainly due to higher contribution from the power and resources divisions.

It also benefited from a positive exchange translation difference arising from the strengthening of Chinese Renminbi against ringgit and a gain of RM13.3mil from quoted investments, compared to a loss of RM179,000 a year ago.

MFCB’s core operating divisions recorded a 4.3% rise in pre-tax profit, boosted by by the power and resources divisions.

Source: The Star

[winston]

not vested

MEGA FIRST CORP BHD

By Public Investment Bank (PIB)

Outperform
Target price: RM3.85

GIVEN its steady recurring income from the power business coupled with decent earnings prospects from its resources arm, Public Investment Bank (PIB) said it believes that Mega First investors currently got both businesses for nearly free at the current share price.

Based on sum-of-parts (SOP) valuation, PIB that has just initiated coverage on the company, saw deep underlying value in the company.

It said further potential re-rating catalysts included stronger-than-expected production growth for the resources business, renewal of concession for the power business in China and Sabah and completion of its hydropower project in Laos by 2019, which would be the growth driver for the group over the next couple of years.

According to PIB, Mega First that was established in 1966, is a relatively low-profile company that has undergone a series of restructuring since it was re-listed in 1991.

The company started as a mining company, operating one of the largest copper mines in Sabah.

Since then, the company has diversified into power, resources and property activities, which have become the core businesses for the group today.

The entry of a new shareholder, Goh Nan Kioh, in 2003 brought further improvement to the group as earnings were enhanced at a decent average annual growth rate of 10% while net tangible asset per share has also leapt from 90 sen to RM3.11 over the last 10 years.

As of financial year 2013, the group has a total net cash and investment in quoted shares of RM178mil or 79 sen per share with annual free cashflow per share of about 32 sen per share.

Backed by the steady cashflow from the power business as well as improved profitability of the resources segment, the company has been using the funds to do share buybacks and already owns 19.9 million or 8.2% of total issued shares.

It has been consistently paying dividends with a minimum of 7 sen per annum or 25% to 40% payout in the last five years, which translates into 3.2% dividend yield.

PIB said its SOP valuation had not taken into account potential contributions from the 256MW run-of-river hydropower project concession in Laos, which could potentially boost the revised net asset values contribution by at least RM1 to RM2 per share upon completion.

The RM1.5bil Don Sahong Hydropower project is due for completion by 2019.

Source: The Star