MY Morning Wrap | Genting Malaysia Subsidiaries Launch US$525 Million Bond Offering

After a morning dip, the market witnessed a notable rebound, primarily driven by a surge in semiconductor prices which boosted the $S&P 500 Index (.SPX.US)$ and $Nasdaq Composite Index (.IXIC.US)$ indices. The latest CPI inflation data, showing the smallest price increase in three years, also played a crucial role in lifting market sentiment. This came alongside reactions to recent debate comments that influenced investor outlook. By the end of the trading day, seven out of the eleven S&P 500 sectors saw gains. The S&P 500 index closed up 1.07%, while the $Dow Jones Industrial Average (.DJI.US)$ slightly fell by 0.31%, and the Nasdaq Composite dropped by 2.17%.

$GENM (4715.MY)$: Genting Malaysia Bhd's indirect subsidiaries, Genting New York LLC (Genny) and Genny Capital Inc, have announced the offering of US$525 million (approximately RM2.28 billion) in 7.25% senior unsecured notes due in 2029. This strategic move is aimed at refinancing existing debt. Alongside the bond offering, Genny is also arranging a new senior secured credit facility which includes a US$775 million delayed draw term loan and a US$150 million revolving credit facility. The notes are set to be listed on the Singapore Exchange, aligning with Genting's broader financial strategy to strengthen its capital structure and liquidity.

$EPMB (7773.MY)$: EP Manufacturing Bhd (KL:EPMB) is set to issue shares representing 30% of its capital, aimed at raising RM39.65 million to fund the construction of a new manufacturing hub in Melaka. The share issuance will see its largest shareholder, Mutual Concept Sdn Bhd, and Bermaz Auto Bhd’s subsidiary, Bermaz Capital Sdn Bhd, each allocated 15% of the capital, translating to 66.08 million shares priced at 60 sen each. Post-placement, Mutual Concept’s stake will increase to 19.01%, and Bermaz Capital will own 11.54% of EP Manufacturing. This strategic move has sparked speculation about a potential collaboration with Bermaz Auto in vehicle assembly, indicating a possible expansion of EP Manufacturing's operational scope and market reach.

$IHH (5225.MY)$: IHH Healthcare Bhd’s subsidiary, Pantai Holdings Sdn Bhd, has initiated steps to establish extensive Sukuk Wakalah programmes totaling up to RM15 billion. This financial maneuver, filed with the Securities Commission Malaysia, comprises both Islamic Commercial Papers (ICP) and Islamic Medium Term Notes (IMTN). The ICP, with a seven-year tenure, will feature maturities ranging from one to 12 months, while the IMTN programme is designed as a perpetual offering with a minimum term of one year. The inaugural issuance is slated within the next 90 business days. The proceeds from these shariah-compliant financial instruments are earmarked for a variety of uses including financing investments, capital expenditures, working capital needs, debt repayment, and refinancing activities, aligning with the company's strategic financial management and expansion plans.

$BAUTO (5248.MY)$: Bermaz Auto Bhd (KL:BAUTO) has experienced a significant 29.94% decrease in its first-quarter net profit, which fell to RM70.22 million from RM100.22 million reported in the same period last year. The decline in profitability is primarily attributed to reduced sales as the company faced intense competition. Concurrently, the company's quarterly revenue saw a 22.32% drop year-on-year, amounting to RM846.18 million compared to RM1.09 billion previously, with the dip largely due to decreased sales volume in domestic operations. Despite the downturn, Bermaz Auto declared a first interim dividend of 3.5 sen per share, scheduled for payment on November 6, as part of its commitment to shareholder returns.

$ICTZONE (03038.MY)$: ICT Zone Asia Bhd has more than doubled its net profit to RM4.37 million in the first half of FY2024, up from RM2.02 million a year earlier, driven by robust performance in technology financing and cloud services. Despite a slight dip in total revenue to RM57.65 million due to softer demand in ICT hardware and software trading, the company declared a two sen per share dividend for its convertible preference shares, payable on October 16.

$MIKROMB (0112.MY)$: Mikro MSC Bhd (KL:MIKROMB) has announced its plans to expand into the signage and interior fit-out industry by acquiring Singapore-based TES Productions & Projects Pte Ltd for RM30 million. The acquisition will be facilitated through the issuance of 134.83 million new shares in Mikro MSC, priced at 22.25 sen each. This transaction represents a 12.6% dilution of the current shares. The acquisition price is pegged at a price-to-earnings multiple of 12.24, reflecting TES’s audited profit of S$730,000 (approximately RM2.45 million) for the fiscal year 2023.

$CITAGLB (7245.MY)$: Citaglobal Bhd (KL:CITAGLB) has announced the acquisition of two new construction contracts valued at a total of RM50.95 million. The first contract, subcontracted by NL Builder Sdn Bhd, involves a 20-month project to construct a riverwall in Kuching, Sarawak. The second contract, awarded by Avos (Malaysia) Sdn Bhd, is worth RM31.6 million and pertains to infrastructure work for the Kuching Urban Transportation System's redline. These projects are anticipated to positively influence Citaglobal’s earnings and net assets per share from FY2024 through FY2026.

$KERJAYA (7161.MY)$: Kerjaya Prospek Group Bhd (KL:KERJAYA) has successfully secured a significant construction contract valued at RM292.8 million to build a 57-storey serviced apartment complex in Kuala Lumpur. The project will include 1,126 residential units, podium parking, and a sub-basement. Awarded by Mega Legacy (M) Sdn Bhd, construction is scheduled to commence on September 17, with a completion timeline of 38 months. This marks the group's eighth contract for the year and is expected to positively impact its earnings and net assets per share from FY2025 to FY2027.

$HEXTECH (5136.MY)$: Hextar Technologies Solutions Bhd (KL:HEXTECH) is currently in exclusive negotiations with Widad Group Bhd (KL:WIDAD) concerning the sale of five industrial plots located in Negeri Sembilan. The total area of these plots is 56,231 sq m, designated for industrial use. Should the transaction proceed, Widad Group plans to compensate Hextar by issuing new shares. The deal is contingent on obtaining the necessary consent from state authorities for the transfer of the plots. Hextar aims to capitalize on this deal to unlock the value of the property and fund the expansion of its technology operations, while Widad seeks to improve its cash flow and enhance shareholder value with this strategic acquisition.