KUALA LUMPUR (Oct 2): Lay Hong Bhd, which has seen its shares surge about 65% to its closing price of RM5.40 today since Aug 17, said it is in talks in relation to a possible joint venture (JV) project to invest in an integrated livestock business overseas.

The JV has not been finalised at this juncture and both JV parties are finalising the principal terms before entering into any legal documentation, which has been targeted to be finalised in a month, Lay Hong revealed in its filing to Bursa Malaysia today.

It was replying to an unusual market activity enquiry issued by the regulator earlier today.

Moreover, Lay Hong said it is in the midst of a discussion “relating to a few possible new foreign investors”, which is also yet to be finalised.

“The company had submitted a few proposals to the potential foreign investors and is currently waiting for their confirmation. The Company expects to complete the negotiation within a month,” it said.

It also intends to acquire the Thai unit of Takaso Resources Bhd, Takaso SC (Thaialnd) Ltd, as part of its business expansion in chicken and food processing to export to regional countries, at an indicative price of RM9 million, cash.

It issued a letter of intent to Takaso on Sept 22, which has been accepted by Takaso today, with an announcement on the proposed transaction being made in an earlier filing on the same day.

Lay Hong said that it will make the necessary announcements for all transactions in due course, in compliance with its obligations under the Main Market listing requirements of Bursa.

Lay Hong (fundamental: 0.75; valuation: 1.4)’s closing price of RM5.40 today is 2.9% or 15 sen higher than yesterday’s close. Its share price gives it a market capitalisation of RM270 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.)