Sasbadi gains 5% after Distinct Motion acquisition

Sasbadi gains 5% after Distinct Motion acquisition
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KUALA LUMPUR (Sept 19): Sasbadi Holdings Bhd’s share price rose 4.67% following its announcement to acquire Distinct Motion Sdn Bhd, which is involved in the business of conducting learning activities related to gadgets, automation systems and robotics technology.

At 11am, Sasbadi gained 5 sen or 4.67% to trade at a high of RM1.12, with total trades of 109,400 shares.

Its unit Sasbadi Learning Solutions Sdn Bhd will acquire Distinct Motion for RM850,000, honouring a promise made to investors during its initial public offering days to establish its own applied learning centre.

The group said the exercise allows for downstream expansion, moving into the provision of learning activities in relation to robotics technology. Distinct Motion’s unit Distinct Element Sdn Bhd is operating a centre known as Little Botz in Atria Shopping Gallery, Petaling Jaya, which conducts classes on robotics technology.

Hong Leong Investment Bank (HLIB) said the acquisition would have a neutral effect on Sasbadi, as there will be no significant contribution from the acquisition yet.

“However, we believe this acquisition will extend Sasbadi Learning Solutions’ principal activity to include conducting learning activities of robotics technology.

“Sasbadi will also gain two operating learning centres with its team of personnel, which is in line with its plans to establish applied learning centres focusing on science, technology, engineering and mathematics (STEM),” said HLIB analyst Nafisah Azmi in a note today.

The research house maintained ‘buy’ on Sasbadi, with an unchanged target price of RM1.40.

“We like Sasbadi due to its strong annual free cash flow (FCF), high growth rate, its innovativeness in creating products that cater to tech-savvy youth and unique education exposure which is closely linked to the country’s education system,” HLIB said.