Asdion in RM412m logistics deal with HK co

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KUALA LUMPUR (June 3): Asdion Bhd secured a US$112 million (about RM412 million) deal to provide logistics services to a Hong Kong-based commodities trader.

In a statement to Bursa Malaysia today, IT software developer Asdion (valuation: 0; fundamental: 1.65) said its wholly-owned subsidiary Venice Sanctuary Sdn Bhd signed a sourcing and off-take agreeement with Hong Kong International Mining Exchange Ltd (HKIM) for the delivery of bauxite.

Asdion said it agreed to deliver four million tonnes of bauxite at a base price of US$28 per tonne for two years. Asdion said the bauxite would be delivered from Kuantan Port in Pahang starting next month (July).

The agreement is governed by Singaporean laws.

"The agreement is expected to contribute positively to the revenue, earnings and net assets of the company for the financial year ending 2016 and 2017. Similar to all the business entities, risk factors affecting the execution of the Agreement, including but not limited to business risks such as prudent financial management, changes in price materials, changes in political, economic and regulatory conditions.

"However, the Board of Directors of Asdion will continue to exercise due care in considering the risks associated with the Agreement and will take appropriate measures in planning the successful execution of the Agreement," Asdion said.

At 12:04pm, Asdion shares rose 10 sen or 10% to RM1.15 for a market capitalisation of RM129.6 million. The stock saw trading volume of some two million shares.

Asdion shares had jumped 140% this year, significantly outperforming the FBM KLCI's 1% decline.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)