MY Morning Wrap | Eco World Development to Sell Industrial Land to Microsoft Payments for RM402.3 Million

The S&P 500 and the Nasdaq closed at record highs on Friday, with the $S&P 500 Index (.SPX.US)$ gaining 0.26% and the $Nasdaq Composite Index (.IXIC.US)$ climbing 0.35%, just over the hurdle for two more record closes. The $Dow Jones Industrial Average (.DJI.US)$ also climbed 0.18%.

$ECOWLD (8206.MY)$: Eco World Development Group Bhd, through its subsidiary, has agreed to sell 123.141 acres of industrial land in Eco Business Park VI in Kulai, Iskandar Malaysia, to Microsoft Payments (Malaysia) Bhd for RM402.3 million in cash, calculated at RM75 per square foot based on the land area. EcoWorld originally acquired the land in September 2023 at RM12 per square foot. Part of the proceeds will be used for land development and associated expenses, as well as to repay bank loans, with the remainder allocated for working capital. The presence of Microsoft Payments is expected to boost demand for other industrial products in Eco Business Park VI, accelerating cash flow generation and potentially facilitating new land acquisitions for EcoWorld.

$GENTING (3182.MY)$: GENM Capital, a subsidiary of Genting Malaysia Bhd, has issued medium-term notes (MTNs) totaling RM400 million, including tranche one of the fifth issuance under the RM5 billion MTN programme worth RM300 million and tranche one of the third issuance under the RM3 billion MTN programme worth RM100 million. The RM300 million notes have a five-year tenure with a coupon rate of 4.92% per annum, while the RM100 million notes have a 14-year tenure with a coupon rate of 5.28% per annum, payable semi-annually. The proceeds will be used for various purposes, including operating expenses, capital expenditure, investment, refinancing, working capital, and financing development projects, including those in Genting Highlands, Pahang. AmInvestment Bank Bhd and Hong Leong Investment Bank Bhd are the joint lead managers for the issuance.

$DELEUM (5132.MY)$: Deleum Technology Solutions Sdn Bhd, an 86.67%-owned subsidiary of Deleum Bhd, has secured a RM105 million contract from Petronas Carigali Sdn Bhd for offshore maintenance, construction, and modification (MCM) services for Peninsular Malaysia Assets (Gas Package) throughout 2024. The contract is effective from May 16 to December 31, 2024, and is anticipated to contribute positively to Deleum's earnings during this period, funded through internally generated funds.

$KPJ (5878.MY)$: KPJ Healthcare Bhd has secured an RM18.3 million contract for renovating floors 8 and 9 of KPJ Bandar Dato Onn Specialist Hospital (KPJ BDOSH), which will increase the hospital's bed capacity from 90 to 150. The contract was awarded to Tg Langsat Development Sdn Bhd (TLDSB), a subsidiary of Johor Corp (JCorp), which owns a 44.99% stake in KPJ. The renovation aligns with KPJ's goals of targeting health tourism and expanding into new markets, and is expected to be completed by November. Shares of KPJ closed unchanged at RM1.94, with a market capitalization of RM8.78 billion.

$SCIENTX (4731.MY)$: Scientex Bhd's subsidiary, Scientex Quatari Sdn Bhd, has agreed to purchase 14 parcels of freehold land in Johor from Lee Pineapple Company (Pte) Ltd for RM381.43 million. The 141.74-hectare land, located near existing developments and adjacent to Scientex's ongoing projects, will be developed into a mixed-property development. Funded by internal funds and bank borrowings, the acquisition is expected to complete in the first half of 2025. This acquisition aims to expand Scientex's land bank and support its goal of building 50,000 affordable homes nationwide by 2028, while also enhancing operational efficiencies and focusing on high-demand affordable housing.

$PUC (0007.MY)$: PUC Bhd has signed a heads of agreement to acquire Alevate Capital Sdn Bhd and Alevate Solutions Sdn Bhd for RM200 million, paid in cash and shares. The vendors are Eatcosys Sdn Bhd, a subsidiary of Incite Innovation Sdn Bhd, and Tham Lih Chung. The first RM100 million will be settled by issuing 800 million PUC shares at 12.5 sen each. An additional RM7.5 million in cash will be paid if Alevate achieves a pre-tax profit of RM16 million from July 1, 2024, to June 30, 2025, with the remaining balance contingent on achieving a pre-tax profit of RM32 million from July 1, 2024, to June 30, 2026. Alevate Capital is a licensed digital lender, while Alevate Solutions provides technology and digital transformation solutions. PUC's CEO, Cheong Chia Chou, stated that these acquisitions will enhance PUC's fintech, marketing technology, and entertainment technology sectors, driving comprehensive solutions and shareholder value.