AmBank issues 7 put & call warrants

AmBank (M) Berhad (“AmBank”) is issuing seven new European style cash-settled structured warrants to meet investors’ demand for trading opportunities and alternative investments for the current market.

Under AmBank’s Put-Call Pair Programme, there will be three pairs of put and call warrants (the “PW” and “CW”
respectively) over the ordinary shares of Dialog Group Berhad (“DIALOG”), DRB-HICOM Berhad (“DRBHCOM”) and Malaysia Marine and Heavy Engineering Holdings Berhad (“MHB”).

There will also be a CW issued over the ordinary shares of TanChong Motor Holdings Berhad (“TCHONG”). The structured warrants on DIALOG, DRBHCOM and MHB will have tenures of approximately eight months while the call warrant on TCHONG will have a tenure of approximately twelve months. The structured warrants will be listed on 1 July 2011 with issue size of up to 100 million each.

“For AmBank’s upcoming tranche of structured warrants, we are issuing three put and call warrant pairs on DIALOG, DRBHCOM and MHB under our Put-Call PairProgramme, all of which have seen significant trading interest recently on the back of the Malaysian government’s ETP initiatives and M&A activities.

However, as market sentiment remains uncertain and conditions volatile over fears of a slowdown in global growth and Eurozone debt issues, AmBank’s put-call pair programme enables investors to profit on both the ups and downs of share price movements.

AmBank’s put warrants can also be used by investors to hedge their exposure to the underlying share. Each put and call warrant pair is issued with the same strike price over the underlying share,” said Ms Ng Ee Fang,Director/Head, Equity Derivatives, AmInvestment Bank Berhad.

Oil and gas services company DIALOG recently signed a RM1.9 billion agreement to provide engineering, procurement, construction and commissioning (EPCC) works for the first phase of a deepwater petroleum terminal at Pengerang, Johor. The
construction cost of RM1.9 billion is higher than management’s earlier guidance of RM1.7 billion with the schedule of completion extended from end-2013 to 2014.

The first phase of the terminal will have a capacity of 1.3 million cubic metres and will comprise a harbour port, jetty and other marine facilities with waterdepth up to 26 metres. Besides the Pengerang tank terminal project, DIALOG couldalso be potentially involved in the Bentara/Balai marginal field development.

AmBank’s CW and PW on DIALOG are both priced at 15 sen each with gearing of 6.09 times.

Major oil & gas fabricator MHB’s acquisition of Sime Darby’s 130-acre Pasir Gudang yard for RM399 million cash is expected to transform Malaysia’s fabrication landscape. Along with Petronas’ Teluk Ramunia yard, MHB will have access to Malaysia’s largest domestic fabrication yard of 672 acres. Petronas’ capex programme of RM250 billion for the next five years points to an abundance of new projects for fabrication yards. Therefore, MHB’s capacity expansion from the Pasir Gudang yard acquisition is expected to accelerate order book recognition, enhance deepwater capabilities and drive margin efficiencies.

AmBank’s CW and PW on MHB are both priced at 15 sen each with gearing of 5.69 times.

Conglomerate DRBHCOM had recently won the bid for Khazanah Nasional’s 32.2% stake in POS Malaysia. With its stake in POS Malaysia, DRBHCOM subsidiary Bank Muamalat can leverage on POS Malaysia’s extensive network of branches to reach a wider consumer base. POS Malaysia also has an attractive land bank with
potential for commercial development. DRBHCOM’s automotive joint-venture with Volkswagen AG to assemble Volkswagen vehicles is slated to start production towards the end of 2011. AmBank’s CW and PW on DRBHCOM are both priced at 15 sen each with gearing of 5.02 times.

Automotive assembler and distributor TCHONG posted strong quarter-on-quarter earnings growth of 53% for Q1 2011 (ended 31 Mar 2011) on the back of a 36% increase in sales revenue. Strong demand for its high-end CKD Teana model also helped boost average selling prices for its vehicles by 19%. For Q1 2011, 1,790 units of Teana were sold compared with only 476 units in Q4 2010. Although parts supply was disrupted by the major Japan earthquake and tsunami in March, parts supply from Nissan to TCHONG is expected to return to normal by July. As for TCHONG’s operations overseas, subsidiary Nissan Vietnam Ltd. is breaking even at EBITDA level. AmBank’s CW on TCHONG is priced at 15 sen each with gearing of 3.77 times.

This offer is aimed at sophisticated traders who want to trade on the direction and volatility of DIALOG, DRBHCOM, MHB and TCHONG. The new CWs and PWs have gearings ranging between 3.77 and 6.09 and are targeted at investors who want leveraged exposure to the underlying on both the upside and downside. - Bloomberg

Read more: AmBank issues 7 put & call warrants

Tan Chong Motor to venture into luxury cars manufacturing

Written by Joseph Chin Saturday, 13 November 2010 20:38

KUALA LUMPUR: TAN CHONG MOTOR HOLDINGS BHD [] will invest RM285.0 million to manufacture and assemble luxury passenger cars at the Kota Kinabalu Industrial Park in Sabah.

Tan Chong said on Friday, Nov 12 it had received an approval from the Ministry of International Trade and Industry for a manufacturing licence at the industrial park to manufacture and assemble luxury passenger vehicles and commercial vehicles.

“The approval letter is subject to, among others, the condition that the manufacturing and assembly activities shall be for luxury passenger cars with engine capacities of 1,800cc and above, at on the road price of not less than RM150,000,” it said.

Tan Chong said the project would focus on the CONSTRUCTION [] of a manufacturing facility for 4-wheel drive vehicles with an initial planned production capacity of 3,000 units per annum.

“The group plans to invest up to RM285 million for the project (including purchase of 50 acres of land in the industrial park), which will be implemented over several phases,” it said.

The Sabah-owned industrial estate is 25 km north of Kota Kinabalu and occupies 8,320 acres, and it is set to be the next major centre of growth for the state.

Tan Chong said the state government’s plan was to establish Sabah as the gateway to the Brunei-Indonesia-Malaysia-Philippines-East ASEAN Growth Area (BIMP-EAGA).

Taken from here...

OSK is offering 6 new call warrants

OSK is offering 6 new call warrants today, 20 April 2010 on MISC Berhad (MISC-CH: RM0.160), MUDAJAYA Group Berhad (MUDAJYA-CA: RM0.150), Kecana Petroleum Berhad (KENCANA-CB: RM0.150), Hartalega Holdings Berhad (HARTA-CB: RM0.150), Tan Chong Motor Holdings Berhad (TCHONG-CC: RM0.20) and Top Glove Corporation Berhad (TOPGLOV-CC: RM0.150). Tentative listing date will be on 27 April 2010.

KENCANA-CB, HARTA-CB and TCHONG-CC are by way of market making and no initial placement will be made. MISC-CH, MUDAJYA-CA and TOPGLOV-CC are offered by way of private placement and open for subscription application. Closing of the offering on 21 April 2010.

CIMB Research upgrades Tan Chong to Outperform TP=RM7.00

KUALA LUMPUR: CIMB Equities Research has upgraded its outlook for TAN CHONG MOTOR HOLDINGS BHD [] and rated it as an outperform and its top pick in the auto sector.

It said on Friday, April 9 that its sum-of-parts based target price is pushed from RM4.55 to RM7.

CIMB Research said this is an excellent entry point to ride on the following major themes for Tan Chong over the next three years.

The factors are strong earnings growth trajectory; model mix expansion, and regional ambitions and Indochina strategy.

“We are now projecting an impressive EPS CAGR of 47% as our FY10-12 earnings are raised 38-62% after 1) upping our sales volume forecasts by 5-13%, and 2) raising operating margins by 1-2 percentage points for a stronger ringgit, better product mix and economies of scale,” it said.

OSK Research raises Tan Chong (4405.KU) target price to MYR4.51

OSK Research raises Tan Chong (4405.KU) target price to MYR4.51 from MYR4.26 after company announced it has secured exclusive rights to distribute Nissan vehicles in Laos, with distribution expected to commence in 2Q10; analyst Ahmad Maghfur Usman says move into Laos market, along with recent clinching of similar rights in Cambodia, will complement Tan Chong's manufacturing plant being set up in Vietnam; says although Laos still an undeveloped vehicle market currently, venture "augurs well" for Tan Chong in longer-term; expects immediate sales to be mostly pick-up trucks, with sales volume forecast at 200 units in 2010, rising to 300 units in 2011 and 2012. Raises revenue forecast over next 3 years by 0.6%-0.9% to factor in Laos sales, resulting in 1.0%-1.8% rise in earnings projections. Keeps at Buy. Tan Chong last traded +0.8% at MYR3.80. (benjamin.low@dowjones.com)

AmResearch keeps Buy call on Tan Chong with unchanged MYR4.70 target

Tan Chong Motor (4405.KU) last +1.5% at MYR3.36 after announcing awarded exclusive distribution rights of Nissan Motors' CBU (completely built-up) vehicles in Cambodia, says dealer with local brokerage. "The stock is higher because the exclusive distribution rights will widen its earnings base and boost its bottomline"; tips stock to retest morning high of MYR3.41 later. "We foresee Tan Chong's coming Vietnam operations turning into Nissan's regional production hub - especially for supply to less developed auto markets in the region - including Cambodia and Laos given proximity and more efficient cost base," says AmResearch; keeps Buy call with unchanged MYR4.70 target.

Note: Distribution agreement with Nissan
Tan Chong’s wholly-owned subsidiary, ETCM (C) Pty Ltd (“ETCM (C)”) and Nissan Motor Co Ltd (“Nissan”) has signed a new Distribution Agreement yesterday. With the signing of the new agreement Tan Chong will be the sole and exclusive distributor of Nissan’s CBU vehicles in Cambodia for a period of two years with the option of renewal every year thereafter. This agreement is expected to take effect in the second quarter of 2010 with an initial sales volume of 200 units.

Tan Chong Motor - Regional drive on fast gear

KUALA LUMPUR: OSK Investment Research says Tan Chong Motor's management has guided that Tan Chong will be expanding regionally hand in hand with Nissan, with the former becoming the motor giant's strategic partner in expanding its presence in the still untapped ASEAN market.

"Tweaking our earnings higher by 22%-43% for FY10-FY11 on the back of better vehicle sales given the brighter prospects ahead and lower yen forecast, we derive a new target price of RM4.12 and upgrade our call to BUY from NEUTRAL previously," it said on Monday, Jan 18.

OSK Investment Research said it was raising its FY10 and FY11 revenue forecast by 22% on a 7% increase in volume. We see fresh demand for vehicles in 2010, which will be centered on Nissan's existing and new CBU line-ups, commercial vehicles, its upcoming CKD version of the Nissan Teana and the Nissan Livina X-Gear.

"We derive much comfort from Management's confirmation that Nissan Motors remains committed to making TCM a key strategic partner in embarking its regional ambitions while Nissan will intensify its focus more on the lucrative India, Thailand and China markets.

"This will see Tan Chong Motor being transformed into an export hub for not only the supply of complete vehicles but also the sourcing of critical auto parts and components from 2014 onwards," it added.

TCHONG (TP RM4.12–BUY) - osk

TCHONG (TP RM4.12–BUY) Company Update: Regional Drive on Fast Gear
Management has guided that Tan Chong (TCM) will be expanding regionally hand in hand with Nissan, with TCM becoming the motor giant’s strategic partner in expanding its presence in the still untapped ASEAN market. Tweaking our earnings higher by 22%-43% for FY10-FY11 on the back of better vehicle sales given the brighter prospects ahead and lower yen forecast, we derive a new TP of RM4.12 and upgrade our call to BUY from NEUTRAL previously.

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