Peeps,
Something interesting is brewing in engineering outfit Taliworks Corp Bhd.
Taliworks is an investment holding company involved in water treatment and supply, waste management
via operations and maintenance (O&M) contract and concession, construction and toll concession
This can be traced from the recent performance of its share price, which rose as high as RM1.42 per share and then retreated to some RM1.34 per share and noon today.
The highest price of the stock peaked at RM1.43 per share last Friday, the highest since Jnaruary 11, 2011.Based on the the share price of RM1.39 yesterday, Taliworks has a market capitalisation of RM606.72 million.
Well, this company came to my radar a few months back, and I had the opportunity to attend and interview–along with other reporters–the soft-spoken CEO, Ronnie Lim Yew Boon, after it convened its annual general meeting on June 18, 2014 at Sime Darby Convention Center.
Here is the article that I wrote on Taliworks, which was published on Thursday, June 19, 2014.
The article above talks about Taliworks not selling its highway to other parties.
The very reason for this statement was in response to my question to him, which I cited that SILK Holdings Bhd had announced earlier that it is selling its 100% stake in Sistem Lingkaran-Lebuhraya Kajang Sdn Bhd to IJM Corp Bhd for RM398 million cash (click here).
Taliworks currently operates a 11.5km highway spanning from Kajang to Cheras. The highway currently collect two tolls:- one is at Batu 9 Toll Plaza (charge: RM0.90) and one is at Batu 11 Toll Plaza (charge:RM1.00). The toll road provides a steady and recurring income to Taliworks.
Last year, Taliworks recorded an average daily traffic of 137,936. On segmental basis, the average daily traffic at Batu 9 and Batu 11 toll plazas amounted to 74,083 and 63,853.
A simple calculation would yield RM66,674.70 and RM63,853 in daily revenues for toll plazas at Batu 9 and Batu 11 respectively, totalling RM130,527.70 of daily revenue for the highway.
On yearly basis, the revenue for Batu 9 and Batu 11 highways would yield RM24,336,265.50 and RM23,306,345.00, totalling RM47,642,610.50.
If you look at the annual report (click here, go to page 103), Taliworks recorded a total revenue of RM332,404,000 (RM332.40 million), and based on the simple arithmetic that I did–which was not verified by any parties, by the way)–the toll road contributed about 14.33% to the group's total revenue.
The figure for its toll highway revenue, however, was not present in Taliworks annual report 2013. Perhaps, for reasons of confidentiality, I suppose.
Interestingly, the highway toll segment contributed 16.6% to Taliworks' pre-tax profit of RM10.08 million which inched 2% from RM9.81 million in 2012.
In my view, a toll highway is a good recurring income for a company, and selling the asset must be totally and seriously justified.
Anyway.
Yesterday, Taliworks told Bursa Malaysia that EPF bought 32% stakes in its highway from Taliworks.
Chronology
This can be traced back from the announcement by Taliworks to Bursa Malaysia last week, on Friday, August 8, 2014 (click here).
Last week, Taliworks also announced to Bursa Malaysia that it is reorganizing the company, whereby, previously, Taliworks held a direct 55% equity interest in Cerah Sama Sdn Bhd, which is the holding company of Grand Saga Sdn Bhd, the operator of the 11.5 km highway spanning from Cheras to Kajang.
Shareholders having stakes in Cerah Sama Sdn Bhd include Taliworks (55%), The South East Asian Strategic Assets Fund or SEASAF (35%) and Trinitywin Sdn Bhd (10%).
Taliworks said that after the re-organisation, its economic interests in Cerah Sama Sdn Bhd remain at 55%, and becomes its subsidiary.
The new organization chart is as follows:
Then yesterday, on August 11, 2014, Taliworks told Bursa Malaysia that pension fund Employees Provident Fund (EPF) is buying 49% stake in Pinggiran Infrastructure Sdn Bhd, via Pinggiran Ventures Sdn Bhd for RM68.683 million, comprising10,000 ordinary shares of RM1.00 each and 68,673,000 redeemable non-cumulative preference shares of RM0.001.
The purchase is also equivalent to EPF's indirect interest of 31.85% in Cerah Sama, while Taliworks' stake will be diluted to 23.15%.
Following the announcement yesterday, the above organisation chart should change a bit, in the sense that Pinggiran Ventures is now wholly-owned by the EPF. What I am trying to say here is that the line linking Pinggiran Ventures to Pinggiran Muhibbah Sdn Bhd should be removed.
Anyway.
What this corporate exercise will mean is that Pinggiran Muhibbah, the wholly-owned subsidiary will own a 51% equity interest in Pinggiran Infrastructure while EPF will indirectly own the balance 49% through its stakes in Pinggiran Ventures Sdn Bhd.
Reasons for Acquisition
In an announcement to Bursa Malaysia, Taliworks said that Pinggiran Infrastructure will be the new growth engine, and it will be targeting acquisitions of operating infrastructure assets with “predictable cashflows”.
This sentiment was similarly echoed by Taliworks to me when I attended the annual general meeting few months back. From the tone they told me a few month back, Taliworks seem set to gear-up for new growth.
Taliworks added that its long and established track record in toll roads, water treatment and waste management will contribute the deal sourcing and operational expertise to this joint venture.
So something is definitely positively brewing in Taliworks. I wonder what will be next
I wish the company well in its endeavour!
++
Financial Performance
Below is the snapshot of Taliworks' financial performance in the last five years
Something interesting is brewing in engineering outfit Taliworks Corp Bhd.
Taliworks is an investment holding company involved in water treatment and supply, waste management
via operations and maintenance (O&M) contract and concession, construction and toll concession
This can be traced from the recent performance of its share price, which rose as high as RM1.42 per share and then retreated to some RM1.34 per share and noon today.
The highest price of the stock peaked at RM1.43 per share last Friday, the highest since Jnaruary 11, 2011.Based on the the share price of RM1.39 yesterday, Taliworks has a market capitalisation of RM606.72 million.
 |
| Source: Bursa Malaysia |
Here is the article that I wrote on Taliworks, which was published on Thursday, June 19, 2014.
 |
| Source: The Edge Financial Daily, Thursday, June 19, 2014, page 7. |
The article above talks about Taliworks not selling its highway to other parties.
The very reason for this statement was in response to my question to him, which I cited that SILK Holdings Bhd had announced earlier that it is selling its 100% stake in Sistem Lingkaran-Lebuhraya Kajang Sdn Bhd to IJM Corp Bhd for RM398 million cash (click here).
Taliworks currently operates a 11.5km highway spanning from Kajang to Cheras. The highway currently collect two tolls:- one is at Batu 9 Toll Plaza (charge: RM0.90) and one is at Batu 11 Toll Plaza (charge:RM1.00). The toll road provides a steady and recurring income to Taliworks.
Last year, Taliworks recorded an average daily traffic of 137,936. On segmental basis, the average daily traffic at Batu 9 and Batu 11 toll plazas amounted to 74,083 and 63,853.
A simple calculation would yield RM66,674.70 and RM63,853 in daily revenues for toll plazas at Batu 9 and Batu 11 respectively, totalling RM130,527.70 of daily revenue for the highway.
On yearly basis, the revenue for Batu 9 and Batu 11 highways would yield RM24,336,265.50 and RM23,306,345.00, totalling RM47,642,610.50.
If you look at the annual report (click here, go to page 103), Taliworks recorded a total revenue of RM332,404,000 (RM332.40 million), and based on the simple arithmetic that I did–which was not verified by any parties, by the way)–the toll road contributed about 14.33% to the group's total revenue.
The figure for its toll highway revenue, however, was not present in Taliworks annual report 2013. Perhaps, for reasons of confidentiality, I suppose.
Interestingly, the highway toll segment contributed 16.6% to Taliworks' pre-tax profit of RM10.08 million which inched 2% from RM9.81 million in 2012.
In my view, a toll highway is a good recurring income for a company, and selling the asset must be totally and seriously justified.
Anyway.
Yesterday, Taliworks told Bursa Malaysia that EPF bought 32% stakes in its highway from Taliworks.
 |
| Source: The Edge Financial Daily, August 12, 2014, page 5 |
This can be traced back from the announcement by Taliworks to Bursa Malaysia last week, on Friday, August 8, 2014 (click here).
Last week, Taliworks also announced to Bursa Malaysia that it is reorganizing the company, whereby, previously, Taliworks held a direct 55% equity interest in Cerah Sama Sdn Bhd, which is the holding company of Grand Saga Sdn Bhd, the operator of the 11.5 km highway spanning from Cheras to Kajang.
Shareholders having stakes in Cerah Sama Sdn Bhd include Taliworks (55%), The South East Asian Strategic Assets Fund or SEASAF (35%) and Trinitywin Sdn Bhd (10%).
Taliworks said that after the re-organisation, its economic interests in Cerah Sama Sdn Bhd remain at 55%, and becomes its subsidiary.
TCB [Taliworks] has recently completed a strategic review of its businesses, strengths and weaknesses and opportunities for growth as well as how best to implement a dividend policy of a stable and growing dividend for its shareholders to better reflect the stable cash-flow generating characteristic of infrastructure projects. As a result of this review, TCB will be actively pursuing operating infrastructure projects in developed markets. The purpose of this Re-organisation is to create a new holding company above Cerah Sama to pursue this growth strategy.The holding company above Cerah Sama is now Pinggiran Infrastructure Sdn Bhd.
The new organization chart is as follows:
 |
| Source: Taliworks as announced in Bursa Malaysia (click here) |
Then yesterday, on August 11, 2014, Taliworks told Bursa Malaysia that pension fund Employees Provident Fund (EPF) is buying 49% stake in Pinggiran Infrastructure Sdn Bhd, via Pinggiran Ventures Sdn Bhd for RM68.683 million, comprising10,000 ordinary shares of RM1.00 each and 68,673,000 redeemable non-cumulative preference shares of RM0.001.
The purchase is also equivalent to EPF's indirect interest of 31.85% in Cerah Sama, while Taliworks' stake will be diluted to 23.15%.
Following the announcement yesterday, the above organisation chart should change a bit, in the sense that Pinggiran Ventures is now wholly-owned by the EPF. What I am trying to say here is that the line linking Pinggiran Ventures to Pinggiran Muhibbah Sdn Bhd should be removed.
Anyway.
What this corporate exercise will mean is that Pinggiran Muhibbah, the wholly-owned subsidiary will own a 51% equity interest in Pinggiran Infrastructure while EPF will indirectly own the balance 49% through its stakes in Pinggiran Ventures Sdn Bhd.
Reasons for Acquisition
In an announcement to Bursa Malaysia, Taliworks said that Pinggiran Infrastructure will be the new growth engine, and it will be targeting acquisitions of operating infrastructure assets with “predictable cashflows”.
This sentiment was similarly echoed by Taliworks to me when I attended the annual general meeting few months back. From the tone they told me a few month back, Taliworks seem set to gear-up for new growth.
Taliworks added that its long and established track record in toll roads, water treatment and waste management will contribute the deal sourcing and operational expertise to this joint venture.
So something is definitely positively brewing in Taliworks. I wonder what will be next
I wish the company well in its endeavour!
++
Financial Performance
Below is the snapshot of Taliworks' financial performance in the last five years
 |
| Source: Taliworks Annual Report 2013 (click here) |
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