MULPHA International Bhd says it expects to post satisfactory results in 2004 as it reorganises group operations in the three core areas of property, investment holding and financial services while seeking to divest its trading and manufacturing businesses should a good offer pop up.

"For 2004, we cannot project profit, but what I can say is on the exceptional items or impairment which has resulted in the last couple of years, we hope we've seen the last of them," said its chief executive officer Chung Tze Hien.

"And without impairment, naturally our profits will be better. Australia is still humming, while here, with the new administration things are looking good, so property prices should move up not down. Barring unforeseen circumstances, we should see satisfactory results," he told Business Times in an interview. Interestingly, most of the property developer's revenue and profits are from abroad, the bulk of it from Australia and a healthy portion from Hong Kong and China.

Mulpha booked a record RM77.36 million profit for the year ended 31 December 2003, redeeming the RM7.32 million net loss in 2002 when property write-offs gobbled operational profits. Mulpha has bought 139.4 million shares, the maximum of 10 per cent of its own shares, from the open market at an average price of about 44.7 sen each, on strong belief that its shares are grossly undervalued.

An analyst who covers Mulpha said in a recent note to investors: "As share buybacks continue to be accretive to net tangible assets (NTA), we believe Mulpha will make a decision soon on the fate of the treasury shares." Areas in Malaysia where the company could develop further are the property side and financial services provision.

Mulpha has an ample landbank and locally and most of its projects are long term.
The company is revisiting some of its developments, to work out the best possible timing for development and launches, such as the office apartment development on land next to Phileo Damansara in Section 16, Petaling Jaya. It also has developments at the upmarket Leisure Farm Resort in Johor.

Mulpha Capital Holdings Sdn Bhd is the group's wholly-owned financial services arm engaging in corporate finance and advisory services, one of the three segments Mulpha has identified as a core business going forward.

"It's now a better time for us to be better accessible to the market (investors), but honestly there's still a lot more work to do because operationally the group has to perform, hype can only last you that long," said Mulpha Capital's executive director Derrick Tan Peng Koon.

Mulpha is one of 11 KLCI components whose shares are trading below RM1 each currently. Mulpha closed at 71 sen yesterday (April 28), 17.92 per cent off its 52-week high of 86.5 sen on April 5 while still more than double its 52-week low of 37 sen on April 21 last year. Mulpha reported a net tangible asset value of RM1.26 per share for the year ended 2003. The company also owns the sports brand "Head" and sponsors national squash player Nicole David.

Of the 100 stocks of the Kuala Lumpur Composite Index, Mulpha is at number 93, based on yesterday's closing prices. Mulpha's market capitalisation of RM990.03 million makes it the 69th largest stock among the 100-member key index, comparable to Lingui Development Bhd's RM1.06 billion and Bandar Raya Developments Bhd's RM1.12 billion.

Mulpha International was incorporated in Malaysia on 12 August 1974 as Guthrie Malaysia Holdings Bhd. It assumed its present name when listed on the main board of the Kuala Lumpur Stock Exchange (now Bursa Malaysia Securities Bhd) on 30 November 1983.

It has over the years built businesses in Australia, Hong Kong, China, Singapore, the Philippines and Vietnam. At present, the group has a stake in two listed companies in Malaysia, Mulpha International and 50.6 per cent owned Mega Pascal Bhd besides 75-per cent owned industrial paints manufacturer Greenfield Chemical Holdings Ltd which is listed in Hong Kong.

Mulpha, which divested a 80 per cent stake in construction unit, Mudajaya Corp Bhd, for RM118 million cash on 19 February 2003, now has 19.5 per cent stake in Mudajaya which is pending listing. An analyst expects Mulpha to raise its stake in Mudajaya to above 20 per cent to be able to consolidate or equity-account the latter's earnings into its books.