Fututech up almost 27% on asset injection proposal

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KUALA LUMPUR (Feb 9): Construction outfit Fututech Bhd gained as much as 26.96% on news its major shareholders had proposed an asset injection exercise that could expand its order book to over RM2.3 billion.

Its warrants gained as much as 52.78% or 19 sen to 55 sen.

At 11.16 am, Fututech (fundamental: 2.55; valuation: 1.2) was traded at RM1.34, up 16.52% or 19 sen, with 653,200 shares changing hands, making it one of the top gainers in the morning session.

Its warrants were up 13 sen or 36.11% to 49 sen, with 349,000 shares traded.  

Fututech Bhd announced last Friday it had entered into a Heads of Agreement (HOA) to acquire Kerjaya Prospek (M) Sdn Bhd and Permatang Bakti Sdn Bhd, from its major shareholders Datuk Tee Eng Ho, Datin Toh Siew Chuon and Tee Eng Seng, for RM380 million.

The proposed injection, once concluded, would present the Fututech group with an enlarged construction order book of more than RM2.3 billion.

Fututech executive chairman Eng Ho, who controls about 72.18% stake, has also provided an aggregate net profit guarantee of RM150 million for both Kerjaya Prospek and Permatang Bakti, for the financial years ending Dec 31, 2015 (FY15), FY16 and FY17.

The proposed acquisition will be satisfied by the issuance of 280 million new shares at an issue price of RM1.16 per share, and cash payment of RM55.2 million to the vendors.

(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.)