MY Morning Wrap | YTL Power's Subsidiary to Acquire 31.42% Equity in Ranhill Utilities, Triggering Mandatory Takeover Offer

The $Nasdaq Composite Index (.IXIC.US)$ broke records on Tuesday, reaching over 17,000 for the first time before pulling back following a three-day break for Memorial Day. The index hit an all-time closing high of 17,019, but about 2,000 more equities were declining than climbing by the numbers. Just after the close at 4 PM EST, the $S&P 500 Index (.SPX.US)$ traded up 0.03%, the $Dow Jones Industrial Average (.DJI.US)$ fell about 0.655%, and the Nasdaq Composite Index closed up 0.59%.

$YTLPOWR (6742.MY)$ & $RANHILL (5272.MY)$: YTL Power's 70%-owned subsidiary, SIPP Power, has agreed to acquire about 31.42% equity in Ranhill Utilities from Tan Sri Hamdan Mohamad and related entities, triggering an unconditional mandatory takeover offer for any remaining shares. The purchase price of 99.5 sen a share represents a 36.62% discount over the last traded price of Ranhill. YTL Power and SIPP Power will have an aggregate direct shareholding in Ranhill of 53.19%, up from 21.77% previously, breaching the 50% threshold to trigger the MTO. The acquisition and MTO will be funded via internally generated funds and are expected to be completed in June 2024 and the third quarter of 2024, respectively.

$MPHBCAP (5237.MY)$: MPHB Capital's controlling shareholder and chairman, Tan Sri Surin Upatkoon, plans to take the credit services provider private through a selective capital reduction of RM748.11 million. Entitled shareholders will receive RM1.70 per share, an 8.3% premium to MPHB's closing price on Monday. Upatkoon and his family control 43% of MPHB. The offer price also represents a 30.8% premium to the prevailing three-month volume-weighted average price. The board of MPHB will deliberate on the proposed capital reduction and decide on the next course of action.

$IHH (5225.MY)$: IHH Healthcare is still in the process of looking for potential mergers and acquisitions (M&As) in Indonesia and Vietnam, with a focus on deals that are earnings accretive and offer significant synergies, according to group CEO Dr Prem Kumar Nair. The group has not made any specific decision yet, as it would need to evaluate market attractiveness, availability of a sufficient and skilled workforce, and proximity to its current markets for any deals. In addition to expanding in Indonesia and Vietnam, IHH is also exploring M&As in Malaysia, its core market, according to group chief corporate officer Ashok Pandit, who added that the company is consistently evaluating opportunities that can deliver sustainable profits.

$ATECH (5302.MY)$: Aurelius Technologies has proposed a private placement of up to 39.41 million shares, or 10% of its issued share capital, mainly to build a new manufacturing plant at the Kulim Hi-Tech Park in Kedah. The placement is expected to raise RM123.34 million based on an illustrative issue price of RM3.13 per share. In a separate filing, Aurelius posted a quarterly net profit of RM15.73 million for the first quarter ended March 31, 2024, on revenue of RM125.70 million. The company declared a first interim dividend of 2.7 sen per share, with an ex-date of June 12 and a payment date of July 12.

$PESTECH (5219.MY)$: Pestech International has filed a counterclaim against Syarikat Pembinaan Yeoh Tiong Lai (SPYTL) at the Asian International Arbitration Centre over their dispute arising from the termination of a subcontract for electrification system works pertaining to the Electrified Double Track project from Gemas to Johor Bahru. SPYTL is the wholly-owned construction arm of YTL Corp. Pestech said it had submitted its defence and counterclaim to the arbitration notice filed by SPYTL in October 2023. Pestech's subsidiary, Pestech Technology, is seeking a set-off against all amounts claimed by SPYTL and has further filed a counterclaim against SPYTL for reliefs in respect of the issues arising from the termination of the subcontract.

$CDB (6947.MY)$: CelcomDigi, Malaysia's largest mobile carrier by subscribers, reported an 18% year-on-year increase in net profit for the first quarter ended March 31, 2024, largely due to a writeback on provisions. Net profit for the quarter was RM376.46 million compared to RM317.92 million over the same period last year. However, revenue for the quarter slipped 0.8% year-on-year to RM3.15 billion from RM3.18 billion, as lower interconnect rate, reduced bulk messaging traffic, and overall softer usages dragged on service revenue, despite an enlarged subscriber base. The company declared a first interim dividend of 3.5 sen per share for FY2024, payable on June 28.

$UEMS (5148.MY)$: UEM Sunrise, a real estate developer, reported that its net profit for the first quarter ended March 31, 2024, nearly halved from a year earlier as sales fell while operating expenses rose. Net profit for the quarter was RM8.18 million, compared to RM15.35 million over the same period in the prior year. Meanwhile, revenue for the quarter slipped 6.57% year-on-year to RM224.96 million from RM240.78 million. The company did not declare any dividend for the quarter under review.

$E&O (3417.MY)$: Eastern & Oriental reported that its net profit for the financial year ended March 31, 2024, tripled to RM133.61 million from RM44.54 million a year earlier, on the back of higher revenue from its properties segment. Revenue for the full year rose to RM422.83 million from RM318.07 million. For the fourth quarter ended March 31, 2024, net profit more than doubled to RM36.48 million from RM16.09 million. Quarterly revenue also jumped 85.8% to RM121.33 million compared to RM65.30 million a year earlier. Eastern & Oriental did not declare any dividend for the latest quarter.

$SUPERMX (7106.MY)$: Supermax Corp reported its sixth straight quarterly loss on Tuesday, but its net loss for the third quarter ended March 31, 2024, was smaller than a year earlier, thanks to improved profit margins. The net loss for 3QFY2024 was RM686,000, compared to a net loss of RM39.92 million a year ago. However, quarterly revenue dropped 18.63% to RM143.01 million from RM175.74 million in 3QFY2023, which the group attributed to weak glove demand as customers overstocked during the pandemic. Supermax did not declare any dividend for the quarter.