KUALA LUMPUR (Dec 8): Hong Seng Consolidated Bhd's unit and RP Integrated Bhd have mutually terminated their medical drugs and vaccines joint venture just two months after signing the deal.
Hong Seng's 51%-owned HS Bio Supplies Sdn Bhd and pharmaceutical firm RP Integrated established the partnership to pursue distributorship and opportunities relating to medical drugs and vaccines from China's Shanghai Fosun Pharmaceutical Group Co Ltd on Oct 5.
In a filing with Bursa Malaysia today, Hong Seng said, "There was no progress on the intended collaboration and cooperation as contemplated in the consortium agreement."
"Pursuant to the mutual termination, the parties agree to stop undertaking any activity in the name of the consortium," added the IT solutions provider which was previously known as MSCM Holdings Bhd.
Prior to signing the deal, Hong Seng made news after announcing in August its plan to venture into rubber glove making in a bid to turn around its financial performance.
For the year ended March 31, 2020 (FY20), the group saw its loss narrow to RM7.43 million, from RM13.07 million in FY19, due to lower administrative expenses. Revenue for FY20, however, fell 58% to RM4.43 million from RM10.42 million in FY19, due to low business activities which were impacted by the weak economic sentiment and disposal of its loss-making content development business.
For the second quarter ended Sept 30, 2021, the group's net profit grew 51.5% to RM1.43 million, from RM943,000 a year earlier, while revenue was down 60% to RM530,000 from RM1.32 million.
Shares in Hong Seng closed two sen or 1.9% higher at RM1.07 today, valuing the group at RM555.3 million. The counter is up by 664% year-to-date.
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