Just saw a research report on Malton by RHB

We believe Tan Sri Desmond Lim may likely rationalise businesses after
he became the major shareholder of WCT. Possible candidates may
include Malton and Pavilion REIT, as he is a major shareholder of both
companies. A potential consolidation between WCT and Malton is
expected to unlock the value of the latter – given its undervaluation,
strong asset and landbank portfolio. We value the stock at MYR1.75,
based on a 40% discount to RNAV.

Potential M&A angle a re-rating catalyst. The emergence of Tan Sri
Desmond Lim Siew Choon (TSDL) as the major shareholder in WCT (WCTHG
MK, NEUTRAL, TP: MYR1.81) with 19.7% stake (at MYR2.50 per share) has
sparked some market speculation that there could be some potential M&A’s in
the pipeline involving the companies that he has a direct shareholding in. These
include Malton and Pavilion REIT (PREIT MK, NEUTRAL, TP: MYR1.90).

The media has reported that a consolidation between WCT and Malton is
possible, and we think this exercise – if it materialises – would provide TSDL an
opportunity to gain more meaningful control over the “merged entity”. In
addition, given the relatively higher valuations of WCT, the corporate exercise
would help in a re-rating for Malton, which is currently deeply undervalued.

Malton has both property and construction units. While Malton’s property
and construction businesses have strengthened in recent years, the company
on its own is still small. On the property front, the Bukit Jalil City development is
the company’s flagship property project. At its maiden launch in 2015, units
were almost fully sold. Because of this project, the company’s unbilled sales are
currently at a record high of MYR1bn. As for its construction segment, its
current outstanding orderbook stands at about MYR2bn. As WCT is also a
property developer and construction player, it makes sense for both WCT and
Malton to merge – which would strengthen the asset and earnings base to bid
for and undertake larger jobs, and enhance its presence in the property space.
There should also be synergistic benefits via higher operating efficiency.

Bukit Jalil City to underpin earnings growth. Malton has not aggressively
launched many property projects over the last few years, given the market
slowdown. Bukit Jalil City and Rapid City are the only projects launched in
2015, with high take-up rates recorded. Although the market weakened further
in 2016, the booking rate of 70% for the first block in The Park 2 Bukit Jalil City
during its preview late last year is still considered encouraging. The jewel asset
would be the regional retail mall, which has a NLA of 1.8m sqf and is currently
under construction. We believe management may have to rope in an equity
partner for this sizeable commercial asset to help in funding, ie an arrangement
similar to TSDL’s Pavilion Damansara Heights project.

Valuations. We value Malton at MYR1.75, based on a 40% discount to RNAV.
Despite the weak property market, we believe our valuations are reasonable
given the potential catalyst in sight, which would help to crystallise the value of
the company.

Read the entire quarterly report la, not just the financial statements. Management normally discusses the results in further detail inside the notes to the accounts

Grace Ly, most people don't make money from the market

1Q16 EPS at 6.6 sen. If EG sustain this level of quarterly EPS, the stock is trading at below 4x PE now!

1Q16 results actually significantly better than 1Q15. The latter has gain on disposal. Excluding the gain, 1Q16 PBT increased by 5.2x over 1Q15.

Excerpt from Maybank report this morning

What’s New
RAPID's mega packages are finally out. Sinopec Engineering has secured a Letter of Award from PETRONAS for the RAPID package 2 job. This EPCC contract is valued at about USD1.33bn. KNM is one of Sinopec's selected subcontractors for this package, having been involved in the bidding process with Sinopec. While not stated in the Bursa announcement, we believe that KNM’s effective portion is c.USD280m. Works are likely to start in early 2015, over 2 years.

What’s Our View
This is positive development for KNM. Apart from this package, we understand that KNM would also have exposure to several other packages. According to market sources, apart from Sinopec, CITC, Technicas Reunidaf, Petrofac and Toyo are the EPCC winners for the other 4 RAPID-related packages. In total, we expect KNM to secure about USD800m-USD1b worth of jobs from RAPID alone over the next 3 years (2015-17). We expect
subsequent contract flows on RAPID works over the next few months, in favour of KNM. For this, we have raised our 2015-16 earnings forecasts by 44%/40%, taking into account the higher backlog orders (+50% to MYR3b p.a.) expectations. Similar to our other cyclical, order-driven oil & gas stock coverage, we now adopt the backlog-based valuation method on KNM. Orders momentum should drive price performance and this new approach best reflect KNM’s prospects. For this, we have raised our TP to MYR1.50 (+50sen), based on 0.7x EV/backlog multiple for 2015. The 0.7x reflects its 3-year historical threshold. We have assumed a MYR3b order backlog for 2015.