Notable filings

Between Aug 17 and 21, notable shareholding changes on Bursa Malaysia included the disposal of 5.13 million shares or a 5.58% stake in Emas Kiara Industries Bhd by Eastern Courtyard Sdn Bhd, which then ceased to be a substantial shareholder on Aug 18.

The shares were disposed of at 80 sen apiece, just above the prevailing open market price of 79 sen. Emas Kiara (fundamental: 0.95; valuation: 0.90) closed at 77.5 sen on Aug 26.

Eastern Courtyard is deemed controlled by Emas Kiara’s largest shareholder and deputy executive chairman, Wong Kong Foo, who still has a 33.65% stake in the company after the disposal. Wong is also the acting CEO. 

Executive director Lim Yew Hoe was also deemed to have disposed of the 5.13 million shares by virtue of his stake in Eastern Courtyard. Lim retains a 6.14% stake in Emas Kiara.

It is worth noting that the disposal fell within the closed period. On Aug 21, three days after the disposal, Emas Kiara reported a net loss of RM723,000 for the second quarter ended June 30.

Inari Amertron Bhd saw the emergence of a new substantial shareholder — Norges Bank from Norway — which acquired 37.04 million shares or a 5.08% stake on Aug 10. The following day, Norges Bank acquired another 270,000 shares in the back-end semiconductor packaging company to bring its stake to 5.11%.

On Aug 20, Inari Amertron (fundamental: 3; valuation: 1.50) announced a good set of financial results. Net profit rose 40.24% year on year to RM40.38 million for the quarter ended June 30, against revenue of RM255.02 million, up 14% y-o-y. But just before the results were announced, Norges Bank sold 997,500 shares and ceased to be a substantial shareholder. Notice of the disposal was only received by the company on Aug 25.

Notable movements

Takaso Resources Bhd saw the emergence of a new substantial shareholder, Innofarm Sdn Bhd, which acquired 14 million shares or a 6.82% stake on Aug 14. On Aug 19, Takaso announced a series of corporate exercises, including a proposed rights issue of 735 million irredeemable convertible preference shares and 73.5 million free warrants that will raise between RM8.6 million and RM36.75 million.

Takaso (fundamental: 1.65; valuation: 0.30) is also proposing to diversify its core business to include property development, and to increase its authorised share capital from RM100 million to RM400 million. On Aug 21, the company announced a name change to O&C Resources Bhd.

Following that, Innofarm acquired another 1.72 million shares on Aug 24 at an average price of 51.9 sen apiece, bringing its stake to 7.65%.

It is noteworthy that Takaso’s former managing director, Tee Tze Chern, sold out of the company on the same day Innofarm emerged as a substantial shareholder. His vehicle, Nextplus Fortune Sdn Bhd, disposed of 24.1 million shares at 55 sen apiece in a direct business transaction on Aug 14, and most of the shares were acquired by Innofarm.

Leading up to the change in shareholders and announcement of corporate exercises, Takaso’s share price surged from an average of 47 sen to as high as 57 sen on Aug 11 on the back of high trading volumes. It has since fallen, closing at 49 sen on Aug 27.

Another notable mover is SKP Resources Bhd (fundamental: 1.95; valuation: 1.10), which saw its share price more than double from the start of the year to a high of RM1.55 on July 30. The stock has since fallen by 15.4%, closing at RM1.31 last Wednesday.

Amid the fall in the share price, Renown Million Sdn Bhd, a vehicle controlled by major shareholder and managing director Gan Kim Huat, disposed of 11 million shares in a direct deal at RM1.50 apiece on Aug 20. Gan still has a 57.17% stake, of which 45.35% are deemed interest.

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. Visit www.theedgemarkets.com for more details on a company’s financial dashboard.

This article first appeared in Capital, digitaledgeWeekly on August 31 - September 6, 2015.