WCE to build last section of West Coast Expressway

 WCE Holdings Bhd has bagged a contract worth RM301mil from IJMC-KEB joint venture – the engineering, procurement and construction contractor of the West Coast Expressway project – to build the last section of the highway.

In a filing with Bursa Malaysia, WCE said the construction involves 10km in length from the beginning of the Assam Jawa Interchange towards the Tanjung Karang Interchange.

“As per the concession agreement signed with the government of Malaysia dated Jan 2,2013 and the supplemental agreement dated Dec 11,2014, the procurement method for Section 7 is to be carried out by way of an open tender.

“However, in the interest of time and cost, the government has approved the procurement method of Section 7B to be implemented by way of a direct award to a wholly owned-subsidiary and construction arm of the company, KEB Builders Sdn Bhd.

“With this, all the construction packages for the entire alignment of the West Coast Expressway project have been fully awarded, ” it said.

The highway is expected to be completed in 30 months from the start of construction works.

Meanwhile, the highway construction company said IJM Corp Bhd and Lee Chun Fai have an interest in the award won from IJMC-KEB joint venture, in which IJM has an interest.

Besides that, it said none of its directors or major shareholders have any interest in the contract secured.

Moving forward, WCE expects the contract to contribute positively to the group’s future earnings.

The group does not foresee significant risks apart from the ordinary operational risks related to the construction of a highway.

Source: The Star

Share placement effects on Stocks in Malaysia- AT Systematization Bhd, Vsolar Group Bhd, Oversea Enterprise Bhd, Green Ocean Corp Bhd and Fintec Global Bhd.

 IF a company’s shares are considered a form of currency, many small cap companies have been minting money via a series of private placements of new shares over the past 18 months.

A random check on penny stocks shows that the share capital of many of these companies have increased manifold. Among them are AT Systematization Bhd, Vsolar Group Bhd, Oversea Enterprise Bhd, Green Ocean Corp Bhd and Fintec Global Bhd.

The share issuance spree started to gain momentum after Bursa Malaysia relaxed the rules on private placement last April at the peak of the first wave of the Covid-19 pandemic.

The stock exchange raised the private placement general mandate to 20% of a company’s issued share capital, from 10% previously. The threshold is lower than other bourses, including those of Hong Kong and Singapore.

On top of that, companies are permitted to issue up to 30% of their existing share capital in a share placement if the shareholders approve the exercise at an extraordinary general meeting.

The regulators said the relaxation of the rule — until year-end — is an interim measure to help public-listed companies that urgently need to raise fresh capital to sustain their operations during these trying times.

Many small cap companies have opted for the interim measure to raise fresh cash for working capital and future investments or for new business ventures, for instance, production of rubber gloves or distribution of vaccines and Covid-19 test kits.

Fresh capital raised from secondary issuance soared by 76% to RM8 billion in 2020, according to the Securities Commission — evidence of interest in share placements and rights issues.

Coincidentally, most of these companies have a rather similar pattern of fundraising exercises, consisting of a share placement, followed by a cash call and share issuance schemes to reward employees, especially the board of directors.

It is also worth noting that the share prices of such small cap companies usually shoot up soon after these fundraising exercises, despite their dismal earnings performance. Below are some of the companies which have seen a significant increase in their share capital.

 

AT Systematization

Topping the list is ATS, one of the companies that have ventured into rubber glove manufacturing. Its total outstanding shares swelled by 811% to 4.23 billion shares between Jan 1, 2020, and March 15, 2021, according to Bloomberg data.

ATS, in which Fintec Global holds a 9.9% stake, carried out two private placements during the year. The first was proposed in August and the second in November. It issued a total of 1.34 billion shares to raise about RM159.5 million.

The first placement was priced at 6.3 sen to 7.16 sen. Its share price ranged between seven sen and 10 sen in October 2020, when it completed the placement.

The second placement was issued in December at between 15.95 sen and 18 sen — more than 50% higher than the previous one, thanks to the hike in ATS’s share price over the two months.

The first placement was to finance its diversification into the manufacturing and sale of rubber gloves and related machinery, which was in line with its proposed acquisition of industrial glove maker Pearl Glove (Malaysia) Sdn Bhd.

The acquisition was cancelled in November, however, with the group citing the non-fulfilment of certain conditions, without elaborating on them. In January 2021, ATS sued the shareholders of Pearl Glove for RM4.4 million, as it was not satisfied with the result of the exercise.

The second placement was to raise funds for capex for the glove business as well as working capital purposes, as the company was setting up its rubber glove plant in Perak.

Besides share placements, ATS had also undertaken a rights issue of 991.2 million shares to raise RM34.7 million. The proceeds were earmarked for the expansion of its production capacity, repayment of bank borrowings and working capital.

On top of that, ATS has rewarded its employees with share issuance schemes. As at March 10, eligible staff had exercised options amounting to 1.45 billion shares.

 

Vsolar Group

Vsolar Group Bhd, another company linked to Fintec Global, saw its share capital swell 587% to 2.82 billion shares as at March 15, following two private placements, a rights issue and several share issuance schemes to its employees between July 2020 and January this year.

The first placement was announced on Nov 11, and the second was announced about a month later on Dec 16, both for working capital for its solar photovoltaic solutions operations. It raised a total of RM16.5 million.

The issue price for the first placement was fixed at 3.42 sen on Jan 6, 2021, and for the second, at 3.78 sen per share on Nov 11, 2020, when its share price was trading around four sen.

Earlier in the year, the group had raised RM36 million via a rights issue that was completed on July 13. This was to raise capex funds for the development and construction of biomass or biogas plants.

Furthermore, the company has so far granted 901.8 million shares under the share issuance schemes, equivalent to approximately 30% of its share capital.

 

Green Ocean Corp

Like ATS, Green Ocean Corp is also raising fresh capital for its rubber glove venture. Its current core business is the trading of palm oil products.

In 2020, the company started its fundraising activities with a private placement of 28.97 million shares, equivalent to 10% of its share capital in late July. The new shares were priced at 18.5 sen apiece and raised RM5.36 million.

Meanwhile, the hardly traded stock shot up from nine sen on July 22 to 32.2 sen on Aug 10 — the highest level since April 2006. However, it lost ground soon after and closed at 6.5 sen last Friday.

The downtrend did not hinder Green Ocean’s second fundraising exercise in less than two months. In September, it announced a share placement of 95.6 million shares (30% of its share capital) plus a four-for-two rights issue that came with three detachable warrants. On top of that, Green Ocean wanted to grant an employees’ share options scheme (ESOS), involving up to 30% of its total number of issued shares, for eligible directors and employees.

The rights issue of 828.5 million shares was priced at 10 sen and oversubscribed. Subsequently, Green Ocean’s share capital was enlarged to 1.242 billion shares in January 2021, compared with 289.7 million shares a year ago.

Still, the company is expected to issue more shares if its senior officers decide to exercise their ESOS. According to filings with Bursa Malaysia, Green Ocean has granted ESOS to executive director Mak Siew Wei, chairman Datuk Nik Ismail Nik Yusoff, and two independent and non-executive directors Roy Winston George and Khoo Chee Siang.

Mak, who bought into Green Ocean last July with an equity interest of 17.07%, has ceased to be a substantial shareholder as a result of the cash call.

Since Jan 4, the company has granted 963.7 million to the four senior executives in the price range of 5.75 sen to 7.5 sen, which is less than the rights issue price.

 

Fintec Global

Fintec Global Bhd’s issued share capital more than quadrupled to 3.37 billion shares as at March 15, 2021, from 745.56 million as at January 2020.

The group, which is involved in various business sectors by virtue of its equity stake in ATS, Vsolar, Focus Dynamics Group Bhd, DGB Asia Bhd and MLabs Systems Bhd, completed two private placements in 2020.

The first exercise was proposed on April 23, and saw the placement of 82.11 million shares, raising a total of RM2.96 million for working capital purposes.

A month later, it announced another private placement of 282.14 million shares, fixed at an issue price of 5.35 sen for the first tranche of 100 million shares and 7.1 sen for the second tranche comprising 182.14 million shares.

A total of RM18.3 million was raised, earmarked for “investment in healthcare equipment manufacturing and/or trading business” as well as working capital purposes.

On Sept 4, 2020, the group proposed a diversification of its business and subsidiaries to include the manufacturing and sale of rubber gloves, as it hoped to capitalise on the high demand amid the Covid-19 pandemic.

To fund its venture into the glove business, Fintec proposed to undertake a renounceable rights issue of up to two billion new shares, which was subsequently fixed at eight sen per rights share.

The group rewarded its employees with a share issuance scheme, granting roughly 697 million shares to eligible employees. The amount is equivalent to 20% of its current issued share capital.

 

Key Alliance Group

Key Alliance Group Bhd also followed the same path — a share placement, rights issue and share issuance scheme for eligible employees — last year.

Its issued share capital increased 352% to 2.35 billion shares, following two share placements and a rights issue last year.

It undertook two private placements, which saw some 262.1 million new shares being issued.

The first was completed in April 2020, with a total of 57.8 million shares issued at 1.35 sen apiece, raising RM780,705 in proceeds earmarked for the repayment of bank borrowings and working capital purposes.

Three months later, it completed a second private placement for the year, issuing a total of 204.2 million shares at six sen each.

It raised a total of RM12.25 million from the exercise, which was primarily for the expansion of its cloud services, data centre and IT business. A portion of the proceeds went to the building of an internet exchange point at its existing data centre in Menara Lien Hoe.

Last August, the company continued its share issue spree. This time round, it made a cash call to issue up to 982.21 million new shares, raising a total of RM49.1 million to fund its diversification into the marketing, distribution and trading of medical equipment, devices and related products.

Still, the two share placements plus a rights issue failed to meet its capitalisation requirements.

In January this year, Key Alliance proposed another private placement of up to 609.45 million shares, equivalent to 30% of its enlarged share capital, to raise funds for the development of an e-commerce platform for medical equipment, devices and related products.

Similarly, eligible employees were rewarded with a share issuance scheme, receiving a total of 889.5 million shares between February 2020 and January 2021.

 

 

PNB's Amanah Saham Nasional announces total income distribution of RM1.55 bil for five funds

Amanah Saham Nasional Bhd (ASNB), the wholly-owned unit trust management company of Permodalan Nasional Bhd (PNB), has announced a total income distribution payout of RM1.55 billion for the financial year ending March 31, 2021, for five of its funds. 

In a statement today, PNB said the five funds include two fixed price funds, namely Amanah Saham Bumiputera 2 (ASB 2) and Amanah Saham Malaysia (ASM), as well as three variable price funds which are ASN Equity 3, ASN Imbang 2 and ASN Sara 1.

For ASB 2, PNB has declared a dividend of 4.25%, translating into a total income distribution payout of RM488.2 million, benefitting 459,416 unit holders who currently hold 11.5 billion units.

For ASM, the company has declared a total income distribution payout of RM851.2 million or 4.0% dividend, benefitting 559,222 unit holders who currently hold 21.3 billion units. 

"As of March 25, 2021, ASB 2 recorded a net realised income of RM499 million, while ASM recorded a net realised income of RM727.6 million. The performance of ASB 2 and ASM is benchmarked against the 1.95% return of Maybank's 12-month fixed deposit," it said. 

Meanwhile, PNB said ASN Equity 3, ASN Imbang 2 and ASN Sara 1 registered double-digit total returns of 18.7%, 17% and 10.8% respectively for the financial year ending March 31, 2021, driven largely by the recovery of the equity markets from the lows in the year 2020. 

"These returns are benchmarked against the FTSE Bursa Malaysia Top 100 Index (FBM 100) and Maybank's 12-month fixed deposit, at a ratio customised to each fund. 

"During the same period, the FBM KLCI strengthened from 1,351 points to 1,598 points by 18.27%, following improved sentiment with the rollout of the vaccination programme globally and the anticipated recovery of the global economy," it said. 

With these returns, the company said ASNB declared a total income distribution payout of RM76.4 million for ASN Equity 3, which is equivalent to 3.53 sen per unit to 86,306 unit holders with 2.2 billion units. 

Meanwhile, ASN Imbang 2 declared a total income distribution payout of RM45.4 million, which is equivalent to 3.11 sen per unit to 85,147 unit holders with 1.5 billion units, and ASN Sara 1 declared a total income distribution payout of RM91.8 million, which is equivalent to 3.52 sen per unit to 85,776 unit holders with 2.6 billion units. 

"These represent a dividend yield of 3.15%-3.95%t for each fund, based on its respective net asset value (NAV) as of March 25, 2021. 

"The income distributions declared by these funds are derived from the funds’ realised gains, dividends and other income. Income from international investment grew significantly with contributions of 40% to 52% to each respective fund for the financial year to date, reflecting the positive impact of the diversification initiatives undertaken by these funds," it added.

Source: The Edge Markets

SCGM allocates RM20m for food packaging capacity expansion

Food packaging manufacturer SCGM Bhd plans to spend RM20 million to expand its food packaging capacity, as its food and beverage (F&B) packaging sales continue to benefit from the new norm of increased food delivery and takeaway amidst the Covid-19 environment.

The capital expenditure that it allocated for the next financial year ending April 30, 2022 would be used to buy extrusion machines and forming machines.

In a press statement, its managing director Datuk Seri Lee Hock Chai said this capacity expansion is timely to capture rising demand from its customers, and allows them additional capacity to serve even more customers in the domestic and international markets.

“We are seeing encouraging uptake for our F&B packaging such as bento boxes, bakery trays and other products in the last few quarters, as we meet increasing demand from food and beverage (F&B) businesses, in line with higher takeaways amidst Covid-19,” Lee noted.

As the largest thermoform F&B packaging provider in Malaysia, Lee believes SCGM has a competitive edge in sourcing for new clients, particularly in the domestic arena, alongside overseas markets such  as New Zealand, Australia, Singapore, Philippines and Indonesia.

“Hence, by leveraging on our expanded operating capacity, as well as our extensive distribution network and in-house design capabilities to manufacture innovative products, we are set to continue expanding our clientele, going forward,” he added.

In conjunction with the expansion announcement, SCGM reported that its net profit nearly doubled to RM8.1 million in the third quarter ended Jan 31, 2021 (3QFY21) compared to RM4.18 million a year ago, on higher revenue.

The better bottom-line was further supported by lower operating costs as the group consolidated its Telok Panglima Garang factory to its larger Kulai plant since March 2020.

It also attributed the better earnings to lower finance expenses of RM700,000 in 3QFY21, versus RM1.2 million in 3QFY20, on low interest rates and reduced bank borrowings.

Revenue for the quarter jumped 21.09% to RM62.53 million from RM51.64 million a year before, underpinned by its strong F&B packaging segment.

The group declared a third interim dividend of 2.2 sen per share for the financial year ending April 30, 2021 (FY21), with an ex-date on April 12. Meanwhile, the payment date for the dividend falls on April 28, 2021.

Including the first and second interim dividend of 1.7 sen and 1.5 sen paid by the group previously, this brings the group’s total dividend for 9MFY21 to 5.4 sen per share, compared with 1.75 sen per share last year.

SCGM’s total dividend payout for 9MFY21 translates to RM10.4 million or 40.0% of net profit in 9M21.

On a quarter-on-quarter basis, the group’s revenue increased by 2.48% from RM61.01 million in 2QFY21, despite posting a lower net profit compared with RM9.61 million.  

For the cumulative nine-month period (9MFY21), its net profit jumped 150% to RM25.98 million from RM10.41 million a year ago, on the back of favourable sales mix, lower raw material costs and reduced operating and interest expenses incurred during the period.

Cumulative revenue for 9MFY21 grew by 12.4% to RM180.76 million from RM160.82 million, as a result of higher deliveries of F&B packaging and contributions from the new personal protective equipment segment comprising face masks and face shields, which was established since February 2020.  

Acknowledging the current uptrend in resin prices, Lee said even as they continue to trend upwards, the group’s position as the largest thermoform F&B packaging provider and price leader allows it to benefit from economies of scale and adjust prices accordingly.

Share price of SCGM closed up two sen or 1.09% to RM1.86 today, giving it a market capitalisation of RM360 million. There were 563,900 shares traded.

The stock’s price has been on a declining trend from August last year, having halved compared to its recent peak of RM3.74 on Aug 3, 2020.

 

Source: The Edge Markets

Tan Chong Motor to settle RM180m customs bill out of court

Tan Chong Motor Holdings Bhd said it will be settling its RM180 million Royal Malaysian Customs Department (RMCD) bill out of court, by way of reduced bills of demand and compound amounting to RM109 million.

In a filing with the exchange, the car assembler said the settlement is subject to the finalisation of the terms of the consent order.

"The company is pleased to announce that this matter has been resolved amicably and expeditiously as this will enable Tan Chong Motor Assemblies Sdn Bhd (TCMA) to focus on its core business instead of being entangled in a protracted litigation," said the group.

In May last year, RMCD slapped TCMA with the RM180 million bill for excise duties from Nov 1, 2016 to Oct 31, 2019.

TCMA is the group's manufacturing subsidiary with facilities in Serendah, Selangor as well as Da Nang, Vietnam and Yangon, Myanmar.

The subsidiary has built passenger and commercial vehicles for Nissan, Renault, Subaru, Mitsubishi, UD Trucks, Foto and Bison trucks.

Tan Chong Motor's share price closed unchanged at RM1.17, giving a market capitalisation of RM786.24 million.

 Source: The Edge Markets

AirAsia books wider-than-expected 4Q net loss of RM2.4b

 AirAsia Group Bhd posted a bigger-than-expected net loss of RM2.44 billion for the fourth quarter ended Dec 31, 2020 (4QFY20), after the low-cost carrier booked a series of impairments.

Losses per share stood at 73.2 sen, versus 11.5 sen in the fourth quarter ended Dec 31, 2019 (4QFY19).

The impairments incurred include for right-of-use (ROU), receivables, as well as fuel swap losses. On the other hand, the group also booked a gain on disposal of its stake in AirAsia India of RM229.4 million, AirAsia's filing showed.

Excluding the unusual items, AirAsia still booked a loss of  RM1.02 billion for the quarter, as opposed to RM851.78 million in 3QFY20, as group revenue fell 39.62% to RM267.44 million, from RM442.91 million, as Malaysia imposed targeted Movement Control Orders in October and November.

Load factor rose slightly on-quarter to 67%, from 66% in 3QFY20.

“It is notable, however, that the Philippines doubled its passengers carried whilst Indonesia multiplied its number of passengers carried by 11 times quarter-on-quarter. This is testament that for areas where travel restrictions are lifted, there is a solid domestic rebound for air travel,” the group said.

The fourth quarter results brought AirAsia’s net loss for the full-year ended Dec 31, 2020 (FY20) to RM5.1 billion or RM1.52 per share – 66% wider than consensus estimate of 92 sen per share, Bloomberg data showed.

Revenue for the year totalled RM3.14 billion, down 73.56% from RM11.86 billion in FY19. In the period, the group saw a 74% decline in number of passengers carried to 13.31 million, from 51.56 million. Load factor was “relatively healthy” at 74%, said the airline, down from 85% the year before.

A major portion of the loss for the period relates to depreciation of ROU and interest on lease liabilities amounting to RM654.2 million for 4QFY20 and RM2.5 billion for FY20, the airline said.

“While the group had successfully negotiated for deferrals with lessors, pursuant to the practical expedient available under Amendments to MFRS16: Covid 19 Related Rent Concessions, the income statement charge for depreciation and interest were not adjusted,” it added.

The group had RM2.12 billion negative net cash flow for the year, as opposed to RM780.3 million in negative net cash flow for FY19.

“The group has reviewed every aspect of our operations and made great strides in establishing a leaner and more optimised airline operation, as we prepare for an expected surge in demand, post-pandemic,” AirAsia said of its prospects.

“Even if borders remain closed, the group is well-prepared to rely solely on domestic operations alone this year,” it added.

The carrier has also set a timeline for its non-airline and digital business to contribute to 50% of the group topline in five years’ time.

Apart from the final stages of discussion for the Danajamin Prihatin Guarantee Scheme for its potential loans with banks, AirAsia said it also has ongoing deliberations with several parties for collaborations “that may result in additional third party investments in specific segments of the group's business”.

The airline’s co-founder and group CEO Tan Sri Tony Fernandes told The Edge in an interview last week that the group was "targeting RM800 million to RM1 billion" in rights issue (read more on the interview in this week's edition of The Edge Malaysia).

In a conference call with analysts this evening, Fernandes affirmed the upcoming rights issue but did not go into the size and specifics, according to analysts who called in.

One analyst opined the cash call could end up being “more than” the company's estimate, following the record losses and depending on how the recovery path pans out. Past analyst estimates ranged from RM1 billion to RM3 billion, prior to AirAsia’s update on its talks with the financial institutions.

With another challenging quarter expected due to the Movement Control Order 2.0 in 1Q21, another analyst pointed to better days in the 2H, “should travel be allowed again”.

“However, they still need to resolve a lot of issues — mainly their negative total equity... and they still need to look at ways to raise funds," he added.

Shares of AirAsia slid one sen or 0.88% to close at RM1.13 today, valuing the low-cost carrier at RM4.31 billion.      

 

Source: The Edge Markets

IPO Volcano terlebih langgan 176.6 kali

Volcano Bhd, syarikat yang bakal disenaraikan di Pasaran ACE Bursa Malaysia pada 6 April 2021, menyaksikan tawaran awam permulaannya (IPO) bagi bahagian awam terlebih langganan sebanyak 176.6 kali.

Syarikat pengeluar komponen plastik suntikan itu dalam satu kenyataan hari ini berkata, bagi IPO yang akan datang, sebanyak 23,838 permohonan untuk kira-kira 1.46 bilion saham baharu dengan nilai RM512.82 juta diterima daripada rakyat Malaysia.

"Ia mewakili kadar terlebih langganan keseluruhan sebanyak 176.6 kali bagi 8.25 juta saham baru yang disediakan untuk permohonan oleh orang awam Malaysia," katanya.

Volcano sedang mengumpul RM8.75 juta daripada langkah IPO. 

Daripada hasil kutipan itu, kumpulan akan membelanjakan RM5.55 juta untuk pembelian jentera dan peralatan, manakala RM3.2 juta akan digunakan bagi belanja penyenaraian.

Sumber: Berita Harian

Oriental Holdings 4Q profit surges on higher plantation earnings

Oriental Holdings Bhd’ said its net profit surged to RM103.12 million for the fourth quarter ended Dec 31, 2020 (4QFY20) from RM14.99 million in the preceding quarter, thanks to better performance by its plantation segment.

Quarterly revenue rose 4.4% to RM990.2 million from RM948.22 million in 3QFY20 on the back of  higher commodity prices and sales volume.

In a bourse filing, the group said the revenue for its plantation segment increased 86% quarter-on-quarter to RM178 million from RM95.7 million, on higher crude palm oil (CPO) and palm kernel (PK) sales volume which increased by 85.2% and 56% respectively. CPO and PK average prices were also higher by 21.6% and 28.7% respectively.

The segment recorded an operating profit of RM97.1 million (versus an operating loss of RM73.8 million in 3QFY20), which was partly contributed by an RM56.2 million forex gain (against an RM92.7 million forex loss previously). The forex gain was due to the strengthening of the Indonesian rupiah against yen-denominated borrowings, the group said.

On a year-on-year basis, Oriental Holdings’ 4QFY20 net profit was up by 26.32% from RM81.64 million in 4QFY19 while revenue was down 10.02% from RM1.1 billion.

No dividend was proposed in the latest quarter. The group's total dividend payout in FY20 is 24 sen, down from the 40 sen seen in FY19.

For the full financial year, the group saw its net profit shrink 67.44% to RM114.81 million, from RM352.6 million in the previous year. Full-year revenue retreated 34.8% to RM3.36 billion from RM5.16 billion.

The group said lower car sales from its retail operations contributed to lower FY20 revenue with the lower net profit attributed to lower full-year earnings from all business segments, including the plantation segment.

On its prospects, Oriental Holdings said its automotive segment will continue to contribute to its performance under very competitive market conditions amid aggressive promotional campaigns by car companies.

“With the reinstatement of MCO 2.0 in mid-January 2021, 1Q sales from retail operations in Malaysia is not expected to be encouraging despite the vehicle sales tax exemption period being extended to June 2021. The effect will be minimal and dampened further by a shortage of semiconductor chips in the supply chain which will inevitably cause delays in production in the near future,” it said.

Shares in Oriental Holdings closed unchanged at RM5.18, valuing the group at RM3.21 billion. The counter saw 69,600 shares done.

 Source: The Edge Markets

Kerjaya Prospek's Tee brothers make takeover offer at 60 sen per share for E&O

Amazing Parade Sdn Bhd is making a mandatory takeover offer to Eastern & Oriental Bhd (E&O) at 60 sen per share after it bought a 10.89% stake from Sime Darby Bhd.

The offer price is 1.5 sen higher compared with today's closing price of 58.5 sen. The property stock has climbed 62.5% from 36 sen in early November last year.

In a filing with Bursa Malaysia, E&O said it received notice of the MGO from Amazing Parade — the private vehicle of the Tee brothers, who control the construction firm Kerjaya Prospek Group Bhd.

Source: The Edge Markets

Hai-O Enterprise Bhd's 3rd Quarter Results ended 31 Jan 2021

 Hai-O Enterprise Bhd's net profit grew 35.32% year-on-year to RM10.28 million in the third quarter ended Jan 31, 2021 (3QFY21) from RM7.6 million in the previous year, thanks to better contribution from its multilevel marketing (MLM) and wholesale divisions.

The stronger earnings, which came despite revenue staying relatively flat at RM67.23 million, versus RM67.02 million a year before, pushed earnings per share to 3.55 sen from 2.62 sen, its bourse filing today showed.

The group, however, declared no dividend for the quarter. In contrast, it paid a dividend of three sen per share for 3QFY20.

During the quarter, Hai-O said its MLM division continues to actively strategise product launches and devise various sales campaigns with different themes to excite distributors and boost overall sales.

"The overwhelming response for one newly launched lady wear series had boosted sales during the period under review. The division was also able to leverage on e-commerce and social media platforms to widen its reach and recruit higher number of new members," it said.

Hence, the division recorded higher revenue and pre-tax profit of RM133 million and RM27.4 million for the period under review, up 9.5% and 23% from RM121.5 million and RM22.3 million, respectively, in the same period last year.

Meanwhile, the group's wholesale division recorded higher pre-tax profit despite lower revenue, on the back of ongoing cost optimisation initiatives, higher sales for Chinese medicated tonic and premium cooking wine — which carry higher margins — as well as a one-off gain from the disposal of vintage tea amounting to RM900,000.

For the cumulative first nine months of FY21, Hai-O's net profit climbed 36.35% to RM30.90 million from RM22.66 million in the corresponding nine months in the previous year, while revenue grew 1.56% to RM204.61 million from RM201.47 million.

Going forward, Hai-O said its MLM division is embarking on a rebranding exercise by repackaging and reformulating several star products, and will continue to intensify its efforts to recruit new members and retain productive members.

Under its wholesale division, the group will further enhance advertising and promotions through digital marketing of key products, including Chinese medicated tonic.

As for its retail division, the group said it will strengthen efforts to digitalise its business operations to remain resilient.

In view of the above, Hai-O's board of directors expects the group to remain profitable amidst the challenging business environment in the next quarter.

Hai-O shares closed one sen or 0.47% lower at RM2.14 today, valuing the group at RM643 million. Over the past 12 months, the stock has jumped 63% from when it was trading at RM1.31.

Source: The Edge Markets