KUALA LUMPUR (Oct 5): Information technology and e-commerce service provider Lambo Group Bhd has emerged as a new substantial shareholder in China-based sports footwear and apparel maker Sinaran Advance Group Bhd, formerly known as K-Star Sports Ltd, after acquiring 70.08 million shares or 9.96% of Sinaran for RM6.52 million.
In a filing with Bursa Malaysia on Tuesday, Lambo said the company and its subsidiary Oriented Media Holdings Ltd had between Sept 10 and Oct 1 acquired Sinaran shares from the open market.
As at Oct 4, 2021, Lambo held a direct 5.92% stake and an indirect 19.78% stake through Oriented Media in Sinaran.
It is worth noting that Koo Kien Yoon is the executive director of Lambo and non-independent non-executive director of Sinaran.
Lambo said the investment in loss-making Sinaran will enable it to potentially set up an additional e-commerce marketplace to enable vendors and customers in both Malaysia and China to transact, with Sinaran as one of its anchor vendors.
"Lambo Group will also be able to leverage the established reputation of Sinaran in China to target consumers in China. In turn, Sinaran will be able to extend its reach in both Malaysia and China through the new ecommerce marketplace.
In addition, the investment may potentially create an additional revenue stream for Lambo Group, as it integrates upstream to be a vendor for both of its existing e-commerce marketplaces. This would allow the group to enjoy better operational margins, which may in turn improve the profitability of the enlarged Lambo Group," it added.
It noted that the investment was funded entirely from internal funds.
"The investment is not expected to have any material effect on the group's earnings per share, net assets per share and gearing for the financial year ending May 31, 2022," said Lambo.
Lambo shares closed unchanged at 7 sen, bringing a market capitalisation of RM83.79 million. Sinaran shares, meanwhile, settled at 10 sen, valuing it at RM70.38 million.