Get in #MUI NOW IS THE TIME#MALAYAN UNITED INDUSTRIES BERHAD (3891.KL)

PETALING JAYA: Fresh investor interest in tycoon Tan Sri Khoo Kay Peng’s  Malayan United Industries Bhd

 (MUI) and its listed subsidiaries has sparked speculation that he could be looking to divest his 47.7% stake in the asset-rich company.

MUI and its 66.5%-owned subsidiary Pan Malaysia Corp Bhd

 (PM Corp) were two of the top active counters traded on Bursa Malaysia yesterday – breaking out of its mundane trading pattern that the group is known for.

Beyond the excitement of the past few months where Khoo and the group had hogged the limelight for various reasons, all three counters have seen rather stagnant share price movement since 2002.

Yesterday, PM Corp’s share price rose 8.5 sen or 37.8% to close at 31 sen with 65.3 million shares traded. MUI closed up 0.5 sen or 1.7% to 29 sen with 90.7 million shares done.

Its 69.3%-owned MUI Properties Bhd

 also saw movement, closing up 1.5 sen or 4.1% to 38 sen yesterday.

A banker said that the shares were active because of expectations of a corporate exercise.

“It is possible that Khoo may sell his stake in MUI in light of the recent proposed disposal of Pan Malaysia Holdings Bhd

 (PM Holdings) which is the first divestment that the asset-heavy group has undertaken in a long while,” said the banker.

Last month MUI announced the sale of 69.2% or 642.7 million shares in PM Holdings to Datuk Dr Yu Kuan Chon, the major shareholder of YNH Property Bhd

, for RM77.1mil.

The banker pointed out that although MUI had valuable assets, it was also laden with sizeable borrowings of RM970.32mil.

MUI yesterday had a market capitalisation of RM850mil. But the value of its crown jewel, the four-star Corus Hotel Hyde Park in London alone, is said to be £200mil (RM1.08bil). Apart from the property, MUI has a 35% stake in UK-listed Laura Ashley Plc that is worth £77.6mil (RM422.5mil) and a 94.52% interest in retail departmental store Metrojaya that has eight outlets in Malaysia.

“It’s no surprise that the stocks are chased up considering the intrinsic value is much higher,” said a broker.

As at Dec 31, 2013, the group’s total assets and total equity stood at RM2.1bil and RM1bil respectively.

MUI had told Bursa Malaysia that the disposal of PM Holdings to Dr Yu was expected to reduce its total borrowings to RM890.5mil from RM970.3mil as at Dec 31, 2013 and its gearing ratio to 1.09 from 1.25.

“Investors would be excited if fresh blood comes into the company, as it has been asset-rich but rudderless for a long time,” the broker commented on the possibility of MUI seeing a new controlling shareholder.

For the nine-month period ended Sept 30, MUI posted a net loss of RM3.1mil versus a net profit RM17.3mil a year earlier. Revenue for the period shrank to RM441.2mil from RM470.3mil in the previous corresponding period last year.

There have been reports that Dr Yu, who holds 1.3% or 38 million shares in MUI according to Bloomberg data, could be interested in increasing his stake but another source familiar with the matter said this was not true. In fact, Yu has pared down his stake, which was listed at a total of 1.53% in MUI’s 2013 annual report.

Khoo, who is currently embroiled in a high-profile divorce case with wife Pauline Chai, has a net asset value of £193mil (RM1.05bil), according to Forbes.

MUI owns and operates nine hotels and two restaurants in the United Kingdom and two hotels in Malaysia, most of which operate under the “Corus” brand.

Reports of a potential sale of the Corus Hotel Hyde Park in September stirred investor interest, with MUI, PM Corp and MUI Properties seeing their share prices peak on Sept 30.

However, they fell again when MUI denied the speculation on Oct 1, including reports that it had appointed real estate firm Debutesq Group to handle the sale.

Two months later, MUI announced the proposed disposal of its entire 69.19% stake in PM Holdings to Dr Yu, who is also YNH Property chairman, on Dec 12.

It said that around RM60mil of the proceeds would be used to repay its bank borrowings, adding that the disposal was in line with its strategy to divest non-core assets as well as reduce its bank borrowings.

Shares of MALAYAN UNITED INDUSTRIES BERHAD (3891.KL) have seen the needle move -2.33% or -0.005 in the most recent session. The BM listed company saw a recent bid of $0.21 on 13518600 volume. 

Digging deeping into the MALAYAN UNITED INDUSTRIES BERHAD (3891.KL) ‘s technical indicators, we note that the Williams Percent Range or 14 day Williams %R currently sits at -61.90. The Williams %R oscillates in a range from 0 to -100. A reading between 0 and -20 would point to an overbought situation. A reading from -80 to -100 would signal an oversold situation. The Williams %R was developed by Larry Williams. This is a momentum indicator that is the inverse of the Fast Stochastic Oscillator. 

Investors are paying close attention to shares of MALAYAN UNITED INDUSTRIES BERHAD (3891.KL). A popular tool among technical stock analysts is the moving average. Moving averages are considered to be lagging indicators that simply take the average price of a stock over a specific period of time. Moving averages can be very useful for identifying peaks and troughs. They may also be used to help the trader figure out proper support and resistance levels for the stock. Currently, the 200-day MA is sitting at 0.18, and the 50-day is 0.19.

MALAYAN UNITED INDUSTRIES BERHAD (3891.KL) currently has a 14-day Commodity Channel Index (CCI) of -12.20. Active investors may choose to use this technical indicator as a stock evaluation tool. Used as a coincident indicator, the CCI reading above +100 would reflect strong price action which may signal an uptrend. On the flip side, a reading below -100 may signal a downtrend reflecting weak price action. Using the CCI as a leading indicator, technical analysts may use a +100 reading as an overbought signal and a -100 reading as an oversold indicator, suggesting a trend reversal.

The RSI, or Relative Strength Index, is a widely used technical momentum indicator that compares price movement over time. The RSI was created by J. Welles Wilder who was striving to measure whether or not a stock was overbought or oversold. The RSI may be useful for spotting abnormal price activity and volatility. The RSI oscillates on a scale from 0 to 100. The normal reading of a stock will fall in the range of 30 to 70. A reading over 70 would indicate that the stock is overbought, and possibly overvalued. A reading under 30 may indicate that the stock is oversold, and possibly undervalued. After a recent check, the 14-day RSI for MALAYAN UNITED INDUSTRIES BERHAD is currently at 51.15, the 7-day stands at 44.93, and the 3-day is sitting at 29.08.