KUALA LUMPUR (June 25): Knusford Bhd’s wholly-owned unit Kota Ekspres Sdn Bhd (KESB) has entered into a joint venture (JV) agreement with Greenland Malaysia Urban Development Sdn Bhd to bid for construction contracts locally and abroad.
The JV agreement follows the heads of agreement signed on Feb 11.
According to Knusford’s announcement to Bursa Malaysia, the JV company will be known as Greenland Knusford Construction Sdn Bhd. Greenland will hold a 55% stake in the JV company, while the balance 45% will be held by Knusford (fundamental: 2.1; valuation: 3.0).
Knusford said its investment in the company will be funded by internally generated funds.
“The parties seek to optimise the combined strengths of each partner in their respective fields.
“The JV is in line with the expansion plan of Knusford to leverage on the potential growth in the construction business arising from the growth of this sector in Malaysia and other identified countries,” said the company.
Knusford expects the JV to contribute positively to its profitability and growth in the future, but does not expect the JV to have any material effect on its performance for the current financial year ending Dec 31.
Greenland is a subsidiary of Shanghai Greenland Construction (Group) Co Ltd. The Greenland group is a state-owned enterprise with interests in energy, finance, real estate and property development.
Knusford share price gained five sen or 2.76% to RM1.86 for a market capitalisation of RM180.36 million.
(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.)