Inphyy Corner

Midas rebounds in 3Q2013 with RMB16.4m net profit

Back to black after 3Q2013 loss.

Midas Holdings Limited (Midas) reported net profit attributable to equity holders (Net Profit) of RMB16.4 million for the three months ended September 30, 2013 (3Q2013), turning around from a loss of RMB6.1 million for the corresponding financial period in the previous year (3Q2012).

Group revenue soared 48.5% from RMB202.7 million in 3Q2012 to RMB301.0 million in 3Q2013, primarily driven by the Group’s Aluminium Alloy Extruded Products Division, which recorded a 50.0% jump in revenue to RMB287.5 million.

This division accounted for approximately 95.5% of total revenue in 3Q2013. Within the division, the Transport Industry, which also included the supply of aluminium alloy extrusion profiles for freight wagons, was the largest revenue contributor, accounting for 75.6% of its revenue in 3Q2013.

The “Others” segment, which included mainly the supply of aluminium alloy rods and other specialised profiles for industrial machinery, contributed 18.0% of revenue to the Aluminium Alloy Division. Revenue contribution from the Power Industry accounted for the remaining 6.4%.

The Group’s overall gross profit margin was 20.8% for 3Q2013, compared to 31.5% for 3Q2012. The decrease was mainly due to higher per unit production cost and a change in product mix at the Group’s Aluminium Alloy Extruded Products Division.

The Aluminium Alloy Extruded Products Division recorded gross profit margin of 21.0% for 3Q2013, compared to 32.1% for 3Q2012. Other operating income, which mainly comprised interest income and disposal of scrap materials, was RMB2.1 million for 3Q2013, compared to RMB4.0 million for 3Q2012.

The decrease was mainly due to lower interest income during the review quarter. Selling and distribution expenses rose 1.5% to RMB13.2 million in 3Q2013, from RMB13.0 million in 3Q2012.

Administrative expenses increased 3.4% to RMB25.7 million in 3Q2013, from RMB24.8 million in 3Q2012.

Approximately RMB16.8 million (3Q2012: RMB7.6 million) of the interest on bank borrowings that were used to finance the construction of property, plant and equipment for the new production lines were capitalised.

The Group’s associated company, Nanjing SR Puzhen Rail Transport Co., Ltd (NPRT), contributed RMB10.9 million in 3Q2013, turning around from a share of loss in the corresponding financial period.

This was backed by increased train car deliveries during the review period. As a result of the above, the Group achieved a Net Profit of RMB16.4 million.

The Group’s balance sheet remains healthy, with cash and cash equivalents strengthened by RMB337.0 million to RMB884.0 million as at September 30, 2013, from RMB547.0 million as at December 31, 2012. Patrick Chew, Chief Executive Officer of Midas, said, “We are delighted that our core Aluminium Alloy Extruded Products Division and NPRT have made strong contributions to our financial performance for the review quarter.

The overall operating environment has clearly improved notwithstanding some margin pressure.”

"On the business development front, we are seeing exciting developments over the past few months, as our order book received a healthy boost of approximately RMB433.6m, backed by contracts from international and PRC customers, as well as securing our first high-speed train contract since 2011.

The return of high-speed train tenders is an encouraging development for the industry," Mr. Chew added.

According to the China Railway Corporation (CRC), China’s national railway operator, railway fixed asset investments for the first nine months of the year reached RMB369.7 billion, which was a 7.4% increase from the previous corresponding period.

This follows an earlier announcement by the CRC that it will be raising annual investments in fixed assets to RMB660 billion in 2013.

In China’s 12th 5-year plan for railway development, China will have around 123,000 km of railways in operation by 2015, including 18,000 km of high-speed railways and an express railway network totaling 40,000 km in length.

The CRC plans to have approximately 5,500 km of new railway lines put in operation by end 2013, extending the size of the rail network to over 100,000 km, while the high-speed rail network will exceed 10,000 km.

“The Chinese Government’s continued focus on developing the PRC railway network will definitely generate opportunities for industry players. Accordingly, we are optimistic that Midas will be able to leverage on its leadership position in the PRC market as well as NPRT’s capabilities to secure further growth.

Our strategy remains unchanged, and the Group will continue to harness growth opportunities in the PRC and exports to generate value for our shareholders,” Mr Chew concluded.

Why Courts Asia's earnings nightmare may not be over yet

Singapore Business Review – 29 minutes ago

Earnings forecast for FY14F slashed by 32%.

According to DBS, Courts Asia's 2Q14 results were below expectations due to slower than expected revenue
growth and lower margins. Revenue grew 3.3% y-o-y to S$223m but earnings plunged 55% to S$7.2m.

Revenue growth was driven by Singapore sales (+11% y-o-y) and 16% higher SSSG on higher bulk/export sales. DBS expects muted results to spill over to the next two quarters going by management’s past tightening experience.

Here's more:

As such, we have cut our FY14F/FY15F earnings by 32%/33%. We have lowered our SSSG assumptions, as well as interest recognition. With these adjustments, we expect gross margins to remain below 30% for the next two quarters.

Thereafter, expect mild recovery in earnings assuming that management loosens its credit control.

Ezion: 3Q13 Net Profit Up 137.2% To US$38.2 Million.

15 Nov 2013 10:19

Ezion Holdings Limited's revenue for the three months ended 30 September 2013 increased by US$37.6 million (97.2%) to US$76.2 million as compared to the corresponding three months ended 30 September 2012. The Group's gross profit improved by US$18.1 million (97.2%) to US$36.7 million as compared to 3Q12. Barring any unforeseen circumstances that may arise to destabilise the current financial market and global economy, the Group expects to perform better in the financial year ending 2013...

ezion.listedcompany.com/newsroom/2013111...257C22000D8E73.1.pdf

LIONGOLD - SUBSCRIPTION OF 98,186,000 NEW ORDINARY SHARES IN THE CAPITAL OF LIONGOLD CORP LTD (THE “SUBSCRIPTION SHARES”) AT S$0.183 FOR EACH SUBSCRIPTION SHARE TO RAISE GROSS PROCEEDS OF S$17,968,038

info.sgx.com/webcoranncatth.nsf/VwAttach...2013.pdf?openelement

Date of Lifting of Trading Halt * 15-11-2013
Time of Lifting of Trading Halt * 1330 hours

ThaiBev's core earnings fell 15% in 3Q

But here's why it isn't as bad as it sounds.

According to CIMB, ThaiBev's core earnings drop of 15% yoy looks bad but is not as it is due to 1) termination of Pepsi’s contract and 2) a 15-day halt to beer production due to ongoing excise tax negotiations.

If not for the disruption, the beer business may have broken even at the EBITDA level.

Here's more:

This is a decent quarter for Thai Bev, with the key takeaway being a pick-up in spirits volumes, as expected, by 4% as consumer demand returned following the acceptance of a new price reality. This vindicates our belief in the resilience of this business.

But full-year volumes are now expected to decline by 2% instead of holding steady as the implementation of the new tax calculation method in September will bring about further price increases, estimated to be a blended 7-8%.

Falling Knife of the Week: Super Group

By Sudhan P - November 15, 2013

3-in-1 beverage maker, Super Group Limited (SGX: S10), shaved off S$501.8 million from its market capitalisation. This translates to a 20.4% decline in share price, as of yesterday’s close of $3.46, making it our “Falling Knife of the Week”.

11th November 2013 was the Remembrance Day in the United Kingdom and it will surely be a date to remember for all shareholders of Super Group. The company released its third quarter earnings on that day and the company recorded a 17% year-on-year decline in net profits. The revenue, however, had increased by 2% year-on-year. That marked the decline in the share price of Super. At one point, the shares were down 30.5% in the span of three days.

Super Group was established in 1987 and it claims to have pioneered the manufacture of 3-in-1 beverage products in Southeast Asia. Super Group owns the ubiquitous Super and Owl brand coffee product range. Currently, Super has two key business segments – Branded Consumer and Food Ingredients. The Branded Consumer segment carries the beverage products mass-produced for consumers and the Food Ingredients segment produces ingredients such as spray-dried coffee, freeze-dried coffee and non-dairy creamer for multinational F&B manufacturing and food service companies, as well as the hotel, restaurant and café sector.

Early this year, it did a re-branding exercise by unveiling a new corporate logo. Gone was the leafy logo that looked as dated as Rip Van Winkle and on board came a more vibrant red-orange logo that is longing to put a smile on the faces of consumers. Super Group also made its first foray into the F&B outlet scene with the opening of Owl Café at The Star Vista, end of 2012.

In the near future, the company is looking to open up a botanic herbal extract (BHE) plant. The total estimated investment would be around RM138 million (approximately S$56.6 million). Once up and running at full capacity, the plant can produce up to 3,000 tons of BHE. BHE will serve as an additional product in the Food Ingredients segment and this is in line with the Super’s long-term strategy of becoming an ingredient specialist in Asia. Furthermore, certain BHE can be used to enhance the flavor of coffee under its Branded Consumer segment. This may help it to widen its market share by increasing the range of coffee products offered.

Currently, Super Group is trading at 19.6 times its trailing twelve months’ earnings. The dividend yield stands at 2.1%.


Courtesy of The Motley Fool