08 March 2008

Comment on Quarterly Reports 31-DEC-2007

AirAsia

Showing a good great result despite the high oil price, half-year profit shows an increase of more than 100%. There's a foreign exchange gain of RM 134 million included in the half-year PBT of RM 276 million. Excluding this item, the half-year PBT will be only RM 142 million (about 6.0 sen per share). AirAsia only hedge 30% of fuel for the period until Jun-2008, quite a worrying figure. However, the losses in IAA and TAA had been improved in the quarter. With the newly delivered Airbuses, I believe that they will become profitable soon. I've decided to hold the share of company, but not going to increase my investment unless the price fall below RM1.40.

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AKN

It suffered a loss of RM 2.3 million in the quarter. This is due to the provision for diminution in value of investment in Subordinated bond of RM2.425 million, and the loss on sale of marketable securities of RM4.58 million as a consequence from the winding down process of the DDD subsidiaries in HK and China. Excluding these special items, the group would have generated a PBT of RM 4.7 million (about 4 sen per share).

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RUBHD

Show an improved result as compared to last year. There’s still no announcement being made regarding the license migration under WSIA. Last week, the major shareholder RUBHD, Lambang Optima announced that it had just disposed almost all of its holding of RUBHD shares (about 7% of RUBHD total number of share). I still need more time to observe this company.

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SUPERMX

Continue to show growth in both revenue and profit. The 12-month figures show that its profit margin is almost remained as the previous (2006) level. However, the 4th quarter’s margin falls significantly to about 8.2% only. Recently the share price of Supermx has gone down sharply. I had increase my investment this company, because I'm in an opinion that its current price is very attractive ( PE < 8).

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TITAN

As expected, EPS for the quarter is only 3.6 sen. The whole year profit has decrease for 13% as compared to 2006. A tax-exempt dividend of 3.0 sen is proposed. Total dividend for the year is equal to 28% of net profit, a bit lower than its announced dividend policy (30% payout rate). Thought the feedstock price has rise to a record high, prospect for the company is still good, as the demand for polymers (especially PE) remain strong. I believe that the shrink in refinery margin is just temporarily. And the Indonesia plant’s production is only 169KT for the year 2007, still below 40% of its capacity. The new butadiene plant will start to generate profit for the company in Q1-2008.

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