Author Topic: K P S  (Read 1078 times)

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« on: April 21, 2016, 11:05:12 AM »

S’gor ventures into pipe replacement business
Author: Tan KW   |   Publish date: Tue, 22 Mar 2016, 10:50 AM


By Gho Chee Yuan / The Edge Financial Daily   | March 22, 2016 : 8:56 AM MYT   
This article first appeared in The Edge Financial Daily, on March 22, 2016.


Azmin said in September last year the state’s NRW had gone up to 36% from 30% a year earlier. Photo by Sam Fong

KUALA LUMPUR: The Selangor state government, which took over the provision of water supply services in the state as well as in Kuala Lumpur and Putrajaya last year, is now venturing into pipe replacement and related services.

Undertaking the new business will be state-owned Kumpulan Perangsang Selangor Bhd (KPS), which is gearing itself to become a global infrastructure and water utility player.

KPS, in a filing with Bursa Malaysia yesterday, said it will through its wholly-owned subsidiary Nadi Biru Sdn Bhd take up a 51% stake in Smartpipe Technology Sdn Bhd for RM5.1 million cash.

The balance 49% stake will be held by Smartpipe Holdings Sdn Bhd, which is equally owned by Ooi Inn Kee and Abu Bakar Hashim.

Smartpipe Technology is an engineering company offering integrated solutions to water and other utility companies for the maintenance of their pipeline assets for the reduction of non-revenue water (NRW).

KPS said the acquisition will provide it with opportunities to participate in NRW solution projects in the country.

“The proposed investment will also enable KPS to leverage on its past experience in the water industry, mainly in [the] upstream segment,” it added.

KPS said Smartpipe Technology on Nov 25 last year obtained a licence from Netherlands-based Wavin Overseas BV to market, sell and install plastic pipe systems and other patented products in Malaysia.

“Using the expertise and technology available to Smartpipe Techonology under the licence agreement, both parties intend to enter into the business of the marketing, selling and installing of pipes and other products, know-how and technology granted under the licence agreement primarily for the rehabilitation of water mains, drains and sewers,” it added.

Noting that both the federal and Selangor governments have executed NRW reduction programmes, KPS said the unique selling points of Wavin’s products, which provide competitive advantages over the current available technology, could potentially shore up Smartpipe Technology’s order book for the next five years.

In addition, KPS said, the proposed investment will also provide it with the opportunity to participate in the gas and sewerage sectors, as the technology is also designed to cater for these markets.

KPS noted that there is significant value to be unlocked in the NRW market, as there are some 44,000km of pipes in need of replacement throughout Malaysia.

Selangor Menteri Besar Datuk Seri Mohamed Azmin Ali said in September last year the state’s NRW had gone up to 36% from 30% a year earlier. He said the state would look into replacing old pipes, curbing the stealing of water and tackling other issues related to NRW.

Separately, the state executive councillor for infrastructure and public amenities, Zaidy Abdul Talib, said last November that Selangor, Kuala Lumpur and Putrajaya had missed out on savings of about 663 million litres of water per day due to their failure in reducing NRW.

He noted that under a tripartite concessionaire agreement signed by the federal government, the Selangor government and Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) in 2011, Syabas was to have reduced NRW to 19.98%, but the rate was above 32%.

Nevertheless, Zaidy expects NRW to be reduced to 25% this year.

Under a restructuring of the water supply services industry in Selangor, Kuala Lumpur and Putrajaya, the Selangor government — through Pengurusan Air Selangor Sdn Bhd — took over from Syabas and Puncak Niaga (M) Sdn Bhd as the provider of water supply services to consumers in the three places in October last year.

Barring any unforeseen circumstances, KPS targets to complete the deal by the second quarter of this year.

Shares in KPS closed two sen or 1.85% higher at RM1.10 yesterday, with a market capitalisation of RM533.93 million.

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Re: K P S
« Reply #1 on: April 21, 2016, 11:12:12 AM »

Edge Weekly
Trade Wise: Potential growth in the pipeline for KPS
By Kamarul Azhar / The Edge Malaysia   | April 20, 2016 : 4:00 PM MYT   
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This article first appeared in The Edge Malaysia Weekly, on April 4 - 10, 2016.

KUMPULAN Perangsang Selangor Bhd’s (KPS) acquisition of a majority stake in Smartpipe Technology Sdn Bhd will put it in a good position to benefit from projects to reduce non-revenue water (NRW) in the Klang Valley and Putrajaya by the state and federal governments.

The investment in the water piping solution specialist will give state-owned KPS a core business, one that the group can rely on to secure contracts in water pipe replacement and rehabilitation across Selangor and other parts of the country.

The federal government plans to invest RM12 billion for water treatment and distribution assets in the country over the next five years, while Selangor is spending RM800 million to build two water treatment plants, with construction to start this year.

Although KPS might not be able to take up the entire RM800 million worth of projects, the group can bid for parts of the water treatment plants and distribution system, such as the water mains, drains and sewers.

After the disposal of its stake in Konsortium ABASS Sdn Bhd to the state government, KPS was left with its hospitality business and investment holdings, namely a 30% stake in Syarikat Pengeluar Air Sungai Selangor Sdn Bhd and a 20% stake in Sistem Penyuraian Trafik KL Barat Holdings Sdn Bhd.

KPS disposed of its 90.83% stake in Titisan Modal (M) Sdn Bhd to Kumpulan Darul Ehsan Bhd (KDEB) for RM78.05 million, incurring a loss on disposal of RM32.5 million in FY2015. Titisan Modal owns Konsortium ABASS.

KPS’ hospitality business did not do that well last year, as the group closed down Brisdale Hotel and Quality Hotel Shah Alam for renovation. Besides these two hotels, KPS also owns Quality Hotel City Centre in Kuala Lumpur.

For the financial year ended Dec 31, 2015 (FY2015), KPS’ registered revenue of RM85.1 million, compared with RM87.7 million in the previous year, mainly due to lower revenue from its hospitality business and investment holdings.

KPS made a net profit in FY2015 of RM55.3 million, which dropped by more than half from the RM155.57 million recorded in FY2014, mainly due to the loss on disposal of RM32.5 million on the sale of Titisan Modal.

To recap, KPS, through its subsidiary Nadi Biru Sdn Bhd, entered into a shareholders’ agreement with Smartpipe Holdings Sdn Bhd for the subscription of a 51% stake for RM5.1 million.

The investment in Smartpipe will allow KPS to bid for the rehabilitation of water mains, drains and sewers in the state, and elsewhere. Smartpipe’s main business is marketing, selling and installing water pipes through a partnership with Dutch company Wavin Overseas BV.

KPS will also be able to participate in NRW solutions projects in the country. The NRW level in Malaysia is high at 38% on average in 2011, according to government data, compared with Singapore, which has maintained it at 5% over the last two decades.

“The establishment and execution of the NRW reduction programme under federal government and Selangor state initiatives and the unique selling points of Wavin’s products… could potentially shore up Smartpipe order book for the next five years,” states KPS in the announcement.

“According to Malaysian Water Association, in an article published in a local newspaper on April 2015, there is significant value to be unlocked in the NRW market since there are some 44,000 km of pipes in need of replacement throughout Malaysia,” it adds.

On its books, KPS only has RM30 million of borrowings, compared with RM1.25 billion in 2014, as the disposal of its stake in Konsortium ABASS as well as a 30% stake in Syarikat Bekalan Air Selangor Sdn Bhd took away the debts as well. Cash and bank balances stood at RM92.6 million.

The group’s net asset value per share stood at RM2.48 as at Dec 31, 2015. KPS traded at RM1.08 per share last Friday. The low valuation, coupled with the possibility of its stakes in associate companies being bought over, makes KPS an interesting stock to watch.

At its close of RM1.08 per share last Friday, KPS had lost 27% of its market value over the last one year. It is trading at a price-to-book value of barely 0.44 times, compared with 1.59 times for Mitrajaya Holdings Bhd and 1.01 times for Ahmad Zaki Resources Bhd.

At the moment, KPS’ jewel in the crown is its 20% stake in Sistem Penyuraian Trafik KL Barat Holdings Sdn Bhd, the concession holder of Sprint Highway, as well as a 30% stake in SPLASH.

In FY2015 ended Dec 31, KPS’s share of associates’ profits was RM111 million, lifting the group into the black, despite an operating loss of RM48 million. This, however, was lower than the RM149.98 million share of associates’ profits in FY2014.

However, with the state government adamant about taking over all water assets in Selangor, KPS may be expected to sell its stake in SPLASH eventually. The takeover of SPLASH is still ongoing and an independent valuer is working on an estimate of the price.

Thus, the water pipe replacement and rehabilitation business could be a way for KPS to continue to get a slice of the action in the state’s water industry even after losing its stake in SPLASH. The shareholders of SPLASH were offered about RM250 million by the state government. However, Gamuda Bhd, which owns a 40% stake in SPLASH, says it is worth at least RM2.8 billion.  This would value KPS’s 30% stake at RM840 million, which would comfortably allow the group to venture into new businesses or take on bigger contracts.

Nevertheless, Malaysia is not short of water pipe manufacturers and installation providers. JAKS Resources Bhd, Engtex Group Bhd and YLI Holdings Bhd are among the more established names in the industry.

Notably, JAKS Resources has a joint venture — Integrated Pipe Industries Sdn Bhd — with KDEB, the Selangor’s government investment firm, for manufacturing mild steel pipes. KDEB is KPS’s largest shareholder with slightly more than 55%.

With KPS partnering Wavin via Smartpipe, there is some uncertainty with regard to the structure of Selangor’s water pipe businesses.

Will KPS buy out KDEB’s stake in Integrated Pipe Industries, and thus have two technical partners in the water pipe business? Or will KPS’ Smartpipe take over JAKS’ stake in Integrated Pipe Industries, and keep it all in the family?

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Re: K P S
« Reply #2 on: April 21, 2016, 11:32:06 AM »



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Re: K P S
« Reply #3 on: April 22, 2016, 04:06:42 PM »

                                      :hi: :hi: :hi:

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Re: K P S
« Reply #4 on: April 25, 2016, 11:10:31 AM »

                                       :hi: :hi: :hi: :hi: :hi:

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Re: K P S
« Reply #5 on: May 14, 2016, 08:17:42 AM »

财经  2016年05月13日
雪柏朗桑收购King Koil

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(吉隆坡13日讯)雪州柏朗桑集团(KPS,5843,主板贸服股)宣布,与杨晋合(译音)签署股权买卖协议,通过收购Kaiser korp公司60%股权,持有「King Koil」床褥品牌的执照,收购价为2880万美元(约1亿1593万4400令吉)。




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Re: K P S
« Reply #6 on: May 22, 2016, 05:58:18 AM »

Saturday, 21 May 2016
Petronas and ringgit volatility

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If ever there was a time when companies dreaded the volatility of the ringgit against the US dollar, this must be the period.

Form automotive manufacturers to multi-level marketing companies, all are feeling the heat from the volatile ringgit. Tan Chong Motor Holdings Bhd recorded its first quarterly loss in 17 years, while UMW Holdings Bhd has openly declared it is battling the currency movements for its business to be profitable.

Amway (M) Holdings Bhd has seen its profits halve because the company imports the products in US dollars and earns in ringgit. The automotive players are suffering from the same syndrome – buying their components in US dollars and selling in ringgit.

The results clearly show that a volatile currency is not good for business. Most companies are not equipped to deal with the volatility.

However, to be fair to the companies, many are not used to a volatile ringgit. Only since 2009 has the ringgit moved against the US dollar. Prior to that, it was largely at RM3.80 against the dollar.

In the first few years of the ringgit volatility, companies benefited because the currency appreciated against the dollar. In the last one year, the reverse is happening and the outcome has been a disaster.

However, what is intriguing is that even companies that deal predominantly in US dollars, such as Petroliam Nasional Bhd (Petronas), are feeling the heat.

In the latest quarterly results for the first quarter of this year, it showed an RM15.18bil deficit from net movement from currency differences. This amount may be subsequently reclassified to profit and loss, according to the company. Last year, the figure was a surplus of RM8.21bil.

Notwithstanding the amount, Petronas registered a net profit of RM4.57bil in the first quarter, a drop of almost 60% compared to the similar period in the corresponding period last year.

If this amount of RM15.18bil is taken into account, it would seem that Petronas would actually have registered a loss.

Nevertheless, its cashflow from operations is much healthier – at RM9.75bil. This is a more important number in the grand scheme of things, as it needs the cash for its capital obligations until 2018.

Taking on a challenge

UMW Holdings Bhd is synonymous with selling Toyota cars in Malaysia. For years, the tie-up with Toyota Motor Corp has propelled UMW’s fortunes that has allowed it to use the profits generated from that business to expand into other areas.

Ventures into oil and gas (O&G) followed and all seemed well until the price of crude oil collapsed and auto sales hit a speed bump. One report points out that the sales of Toyota cars in Malaysia fell 37.1% in the first quarter of this year and that it was only 12% of the sales target of 85,000 cars for 2016.

While its O&G arm continues to bleed, UMW’s support of its unit saw its net gearing soar to 51.5% at the end of 2015 to RM6.02bil from RM4.2bil in 2014.

The struggles of its main two businesses has put pressure on the company’s share price, as its share price slid from a high of RM13.12 on July 1, 2013 to RM5.70 yesterday.

But surprise, surprise. UMW is not going to * its wounds while hoping for its financials and share performance to improve. It is pumping in RM750mil into an aircraft parts manufacturing business for Rolls-Royce and RM561mil into a new plant in a joint venture with Toyota to manufacture small cars.

The aircraft component manufacturing makes money. Just look at SAM Engineering & Equipment (M) Bhd’s numbers and you get a sense that it is really helping the company. SAM Engineering posted a 13.1% increase in earnings to RM17.4mil for its fourth quarter ended March 31, boosted by a higher profit from its aerospace segment.

The other reason for venturing into the small car segment is that by looking at Perodua’s performance, it’s that segment that, while having a hiccup or two, still attracts buyers in the Malaysian car market.

The only problem is that those projects will take time to digest. In the interim, UMW’s debt will rise, but the one thing UMW has shown is that cyclical businesses will recover in time and when that happens, UMW will be in a position to not only benefit from its traditional core business but also from the new ventures it is going into.

King Koil acquisition

The decision by Kumpulan Perangsang Selangor Bhd (KPS) to pay a whopping RM115.93mil in cash to obtain a 60% stake in the King Koil mattress brand licensing business raises some questions. Businesses like King Koil, which entail the manufacturing and marketing of consumer products around the world and dealing with stiff competition, typically requires strong entrepreneurial leadership. Hence, any acquirer of controlling stakes in such businesses would have to have vast experience in running the daily operations of similar businesses. Does KPS have that experience?

In the announcement, KPS says that it “will drive the improvement of operational effectiveness and efficiency, particularly in ensuring the preservation of the King Koil brand value via defined brand positioning, targeted marketing strategy and enhancement of quality control measures.” Achieving that will not be an easy task. The announcement also does not state clearly how profitable the business is. As such, it is unclear what earnings multiple KPS is paying for this business. Paying RM115.93mil in cash for a 60% stake values the business at some RM193.2mil. Giving it a conservative earnings multiple of say 10 times, this would mean that the King Koil business KPS is buying is making an annual profit of around RM19mil. Is the business that profitable?

To be fair, the filings reveal that the business being acquired has been consistently generating profits with double-digit earnings before interest, tax, depreciation and amortisation margins of over 25% from 2010 to 2014. The business also has been paying out around 80% of profits as dividends (although actual figures are not revealed). KPS says that the target company has an attractive business model - “the brand licensing business model represents high growth potential, as the revenue is mainly derived from the collection of royalty payments based on the terms of the licence agreements. The business also requires minimal capital expenditure in the future.”

That may well be the case, but the bottom line is that these types of businesses require strong day-to-day supervision and quick reactions to changes in market conditions, to name a few.

Time will tell if KPS will be able to achieve this in the running of the business.

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Re: K P S
« Reply #7 on: May 23, 2016, 08:32:55 AM »

Monday, 23 May 2016
KPS proposed RM116mil stake-buy under scrutiny

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PETALING JAYA: Kumpulan Perangsang Selangor Bhd’s (KPS) plan to buy a 60% stake in a mattress maker for RM115.9mil cash may attract queries from shareholders at the group’s AGM this Friday.

This is the first major deal announced by the company since exiting the water concession business late last year.

KPS, which is 57.88% owned by the Selangor investment arm Kumpulan Darul Ehsan Bhd, said last week it was buying into a profitable company that generates licensing revenue of RM29.2mil last year from its businesses in 80 countries.

US-based King Koil Licensing Company Inc (KKLC) owns the King Koil trademark and provides research and development services relating to mattresses and bedding products.


KPS, on May 13, had entered into a share sale agreement with Yeoh Jin Hoe or the vendor to acquire 60% equity stake in the “King Koil®” mattress brand licensing business via Kaiserkorp Corp Sdn Bhd.

Kaiserkorp is the ultimate holding company of KKLC.

Yeoh, who holds 99.99% stake in Kaiserkorp, is also group managing director of Kian Joo Can Factory Bhd, its listed subsidiary, Box-Pak (Malaysia) Bhd. and a board member of Can-One Bhd.

KKLC has presence in over 80 countries via 31 licensees, with its headquarters in Illinois, the United States.

Upon completion of the proposed acquisition, Kaiserkorp will become a subsidiary of KPS.

On May 18, the SSA has become unconditional as all the conditions precedent have been fulfilled by KPS and the vendor.

According to KPS announcement, the RM115.6mil price tag is basically on willing buyer-willing seller basis.

KPS explained that the price takes into consideration of the established brand name of King Koil, future revenue to be generated from the licensing agreements and positive outlook on the global mattress industry.

On the rationale of the investment, KPS said King Koil is a profitable and cash generating business. Kaiserkorp revenue stood at RM29.2mil last year.

“The business had been consistently generating profits with double digit-earnings before interest, tax, depreciation and amortisation margin of over 25% from 2010 to 2014.

“The business also has strong dividend paying capability and history, with at least 80% of net profits distributed to the previous shareholders over the same financial periods,” it said.

Besides mattress, KPS had in March proposed an investment in a water associated business in Smartpipe Technology Sdn Bhd (SPT) for RM5.1mil.

SPT is involved in the marketing selling and installing of pipes selling and marketing of pipes and other products, knowhow and technology primarily for the rehabilitation of water mains, drains and sewers

KPS exited its water concession business when it disposed 90.83%-owned unit, Titisan Modal (M) Sdn Bhd, to Pengurusan Air Selangor Sdn Bhd for RM78.05mil late last year.

KPS is also letting go its 30% stake in Syarikat Pengeluar Air Sungai Selangor Sdn Bhd which is expected to be completed soon

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Re: K P S
« Reply #8 on: May 28, 2016, 03:57:28 PM »

2016-05-28 12:55     

早前,該集團宣佈增持Aqua-Flo股權至51%、收購床褥品牌King Koil的60%股權及Smartpipe科技公司的51%股權。
他預計,雖然King Koil有望在今年開始貢獻淨利,不過今年盈利依然主要由化學貿易業務Aqua-Flo貢獻。

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Re: K P S
« Reply #9 on: May 30, 2016, 07:14:22 AM »

Kumpulan Perangsang targets RM1b revenue by 2018
Posted on 30 May 2016 - 05:39am
Lee Weng Khuen
SHAH ALAM: Kumpulan Perangsang Bhd (KPS), which recently disposed of part of its water assets, aims to achieve RM1 billion in revenue by 2018, and is looking for more acquisitions to achieve the target.

In 2015, KPS' top line was down by 8.9% to RM285.96 million against RM314.03 million in 2014.

Chairman Raja Datuk Idris Raja Kamarudin said the company has allocated RM300 million this year to acquire assets with controlling stake. No specific target sectors have been set.

"We're targeting matured immediate income generating assets to ensure sustained dividend payout and value creation for our shareholders," he told a press conference after the company's AGM here on Friday.

In recent months, KPS has undertaken a few corporate exercises, including the acquisition of a 60% stake in licence holder of the King Koil mattress brand for US$28.8 million (RM116 million). Its also acquired a 51% in chemicals trading firm Aqua-Flo Sdn Bhd and bought 51% equity interest in Smartpipe Technology Sdn Bhd, which is involved in water pipe replacement business, for RM5.1 million.

Idris assured shareholders that the King Koil operations will run well by bringing in expertise and people who are familiar with the franchise business. "This is not a manufacturing outfit ... we purely look at the licensing business."

Nonetheless, he expects Aqua-Flo to be the highest revenue contributor in 2016, while King Koil will provide a stable income stream.

With the disposal of its water asset Konsortium Abbas Sdn Bhd to the Selangor government for RM78.054 million, Idris said, the company's gearing has dropped substantially to only 0.02 times with a lower debt level of RM30 million at end-December 2015.

"Previously it was very difficult for us to look into new acquisitions while we had the baggage of high gearing of RM1.2 billion debts. Now we're to look at new investments as this will give us opportunities to access funding from the financial or capital market," he said.

As for KPS' 30% stake in Syarikat Pengeluar Air Selangor Sdn Bhd (Splash), Idris said he hopes a deal could be reached by Oct 7 this year, when the one-year grace period for the renegotiation of the master agreement between the Selangor government and the water concessionaires ends. However, there has been no sign that Gamuda, which owns a 40% stake in Splash, will accept the state government's offer anytime soon.

Besides Splash, Idris said, another potential divestment is KPS' 20%-owned Sprint Highway, the operator of the Kerinchi Link, Damansara Link and Penchala Link

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Re: K P S
« Reply #10 on: April 20, 2017, 02:52:16 PM »
DIVIDEN 4.4 CENTS BUYLAH :cash: :cash: :cash: