Insider Moves:UCHI Technologies, K-Star Sports Ltd, Opcom Holdings, Mulpha International

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This article first appeared in The Edge Malaysia Weekly, on August 1 - 7, 2016.

 

Notable filings

BETWEEN July 18 and 22, notable shareholding changes filed with Bursa Malaysia included former Renong group chairman Tan Sri Halim Saad’s buying and selling of shares of oil and gas service company Sumatec Resources Bhd.

A July 20 filing shows that Halim bought 46 million shares or a 1.2% stake on June 18 off market at 18.5 sen apiece. This was a sizeable 85% premium to the 10 sen apiece the shares were fetching on the open market but slightly below Sumatec’s net asset value per share of 18.8 sen. That raised his direct holding to 21.98%. A separate filing shows that his privately held Markmore Sdn Bhd sold 46 million shares at 18.5 sen on the same day. Sumatec’s share price has almost halved to a three-year low of 9.5 sen from 18 sen a year ago.

Over at ICT security solution provider AppAsia Bhd, Satvinder Singh emerged as a substantial shareholder with a 6.24% stake after buying 

17.55 million shares on July 18. The shares were crossed in three direct deals at the market price of 12 sen apiece. Formerly known as Extol MSC Bhd, AppAsia has been loss-making since 2013 and was embroiled in a shareholder tussle in 2014.

Meanwhile, fibre-optic cable manufacturer Opcom Holdings Bhd saw its major shareholder Datuk Mukhriz Mahathir acquire nine million shares from M Ocean Capital Sdn Bhd, a private vehicle controlled by his wife Tok Puan Norzieta Zakaria. This raised his direct stake to 29.1%, making him the single largest shareholder instead of M Ocean, which had a 20.9% stake as at June 7.

The shares were transacted at 50 sen apiece on June 7 but the notice for Mukhriz’s purchase was only filed on July 22 while the sale was filed on June 9. Opcom’s net profit for 4QFY2016 plunged 95.4% to just RM86,000 while its share price fell almost 20% year to date. As at end-March, its net cash position stood at RM36.9 million, 37.2% of its market capitalisation.

Over at property developer Mulpha International Bhd, executive chairman and largest shareholder Lee Seng Huang acquired 60 million shares or a 1.88% stake at 23 sen apiece, 6.1% lower than the market price, on July 18. On June 30, US-based investment firm Vanguard Group bought 1.8 million shares, increasing its stake to 1.13%.

Mulpha posted a net loss of RM3.8 million in 1Q2016. It raised RM266.7 million from a rights issue in 2Q2016, with RM200 million or 75% of the proceeds going towards repaying borrowings and the rest to fund property projects in Johor and Australia. Its shares have declined 13.5% year to date and currently trade at a steep 72.6% discount to its net asset value per share of 82 sen.

 

Notable movements

On July 19, China-based sports footwear manufacturer K-Star Sports Ltd saw its controlling shareholder K-Star Sports International Ltd dispose of 26.6 million shares or a 10% stake off market, reducing its holding to 40.4%. Its share price surged 33.3% to eight sen on the same day and its shares, usually thinly traded, have since seen a spike in trading volume.

K-Star has been loss-making since 2012 and turned net debt last year, owing to the prolonged downturn in the competitive sports footwear and apparel market in China. For 1Q2016, its revenue increased 10.5% year on year (y-o-y) to RM42.3 million but net loss increased 9% to RM5.6 million, impacted by higher finance costs.

Separately, electronic component maker UCHI Technologies Bhd’s largest shareholder, Eastbow International Ltd, sold five million shares or a 1.1% stake to Ironbridge Worldwide Ltd on July 19. However, this appeared to be a related-party transaction as Eastbow is controlled by its Taiwanese founder and managing director Ted Kao while Ironbridge is owned by his brother, Edward Kao, who is also an executive director of UCHI.

UCHI’s net profit for 1Q2016 improved 30.8% y-o-y to RM13.4 million, largely thanks to the stronger US dollar against the ringgit. The company expects demand from Europe, its key market, to remain soft and revenue in US dollars to remain flat for 2016. Nonetheless, UCHI is sitting on net cash of RM166.9 million and offers an above-average yield of 6.5%.