KUALA LUMPUR (June 2): Both shares and warrants of RGT Bhd surged as much as 38% and 43% respectively with heavy trading volume today.

As at 10.45am, RGT shares had risen six sen or 24% to 31 sen. The counter saw some 62.68 million shares being traded, some 45 times higher than its 200-day average trading volume of 1.38 million shares.

The counter was picked by Asia Analytica as a stock with momentum yesterday.

Meanwhile, the company’s warrants also soared by some 21% or 3.5 sen to 19.5 sen, with a trading volume of 29.94 million.

RGT Bhd, formerly known as Asia Knight Bhd, was seen returning to the black for the financial year ended June 30, 2019 (FY19), mainly attributed to contributions from its 60%-owned plastic product maker Rapid Growth Technology Sdn Bhd, a firm mainly involved in washroom solutions.

Back in August 2019, the group announced that it planned to acquire the remaining 40% stake in the latter for RM48 million via the issuance of new shares.

In the latest development, RGT said it had temporarily withdrawn the proposed acquisition due to failure to obtain the Securities Commission Malaysia's (SC) approval in relation to a significant change in its business direction or policy arising from its initial acquisition of a 60% stake in Rapid Growth Technology.

Nevertheless, it intends to proceed with the planned proposal, subject to meeting the SC's Equity Guidelines, said the group.

RGT first bought the 60% stake in Rapid Growth Technology for RM48 million in August 2017 in a bid to exit its Practice Note 17 (PN17) status.

The group subsequently shed its PN17 status in 2019, after having languished in the category since 2014, following a disclaimer of opinion expressed by its auditor over its financial statements for the 18-month period ended June 30, 2014 as its shareholders' equity shrank to less than 25% of its issued share capital.

According to RGT's website, it has more than 20 years of experience and technical know-how as an original equipment manufacturer/original design manufacturer (OEM/ODM) partner for the washroom solution industry mainly involved in air care, surface care, skincare and various hygiene products.

It is also involved in OEM/ODM manufacturing of medical devices and automotive air care products.

RGT’s latest financial results for the third quarter ended March 31, 2020 (3QFY20) showed a decline of 62% in net profit to RM610,000 from RM1.63 million, while quarterly revenue fell 39% to RM15.39 million from RM25.62 million a year ago.

For the cumulative nine-month period (9MFY20), the group’s total net profit decreased 37% to RM2.83 million from RM4.52 million, while revenue fell 32% to RM51.16 million from RM75.46 million.