PROPERTY developer EcoFirst Consolidated Bhd might see the emergence of a new substantial shareholder in Datuk Michael Chooi Yoey Sun, former executive director of Signature International Bhd and a major shareholder of Scanwolf Corp Bhd.
Sources say Chooi has been accumulating shares of Main Market-listed EcoFirst both on the open market and off market.
“There have been some new corporate developments at EcoFirst. Chooi, who is better known as a co-founder of Signature International, has been accumulating EcoFirst shares this week [last week] and he is likely to surface as a substantial shareholder as early as next week [this week],” a source from the real estate industry tells The Edge.
Another source, from the financial services industry, says Chooi is buying EcoFirst shares on the open market at an average price of 45 sen apiece while mopping up shares in off-market trades at 50 sen each.
“Chooi’s shareholding in EcoFirst could reach 5% in the middle of next week [this week]. We expect an announcement to be made on Bursa Malaysia soon. This could be just the start as he may continue to raise his stake in the company. Based on EcoFirst’s market capitalisation of over RM600 million, it is estimated that his 5% stake would probably cost him around RM30 million,” the source adds.
Between Jan 11 and 14, theedgemarkets.com had highlighted EcoFirst as a stock with momentum for four consecutive days.
Shares in EcoFirst have gained 12 sen or 30% year to date to close at 52 sen last Thursday, giving it a market capitalisation of RM604.79 million.
Signature International’s Annual Report 2021 shows that Chooi, 59, has more than 30 years of experience in the marketing and management of kitchen systems.
In 1990, Chooi started his business venture in MJKB Sdn Bhd, a company trading in home appliances and furniture. It was then that he developed hands-on experience in merchandising and retail distribution outlets.
In 1994, Chooi and his partner Tan Kee Choong set up Signature Cabinet Sdn Bhd, which later became one of the main operating subsidiaries of Main Market-listed kitchen cabinet maker Signature International. Under their leadership, Signature Kitchen has become a household name nationwide.
Chooi was appointed group executive director of Signature International in November 2007, but he resigned in April last year to pursue other opportunities.
This came a few weeks after home-grown building materials specialist Chin Hin Group Bhd — controlled by low-profile businessman and savvy investor Datuk Seri Chiau Beng Teik — acquired 31.2% equity interest in Signature International for RM93.6 million cash or RM1.17 per share.
In a bourse filing on March 8 last year, Chin Hin said it had signed a conditional share sale agreement with two major shareholders of Signature International, namely Tenyin Holding Sdn Bhd and Chooi, to acquire 15.6% equity interest each under the acquisition.
“Chooi is known in local corporate circles as a sales and marketing specialist. This was seen in how he grew Signature Kitchen. After cashing out from Signature International, I believe Chooi last year pocketed about
RM60 million to RM70 million, and he is now on a shopping spree,” says the source from the financial services industry.
Notably, Chooi emerged as a major shareholder of Scanwolf on Sept 3 last year, with a 12.878% direct stake, after converting his irredeemable convertible unsecured loan stocks (ICULS) to 20 million ordinary shares.
Perak-based Scanwolf is a property developer and manufacturer of architectural, home and office fittings. Since the emergence of Chooi as its substantial shareholder, Scanwolf’s share price has almost doubled from 42 sen on Sept 3 last year to its five-year peak of 81 sen on Nov 12 last year, before it came down to 59 sen last Thursday.
It is learnt that Chooi has invested about RM6 million into Scanwolf.
Scanwolf reported a net loss of RM217,247 for its financial year ended June 30, 2021 compared to a net profit of RM621,931 the year before. Meanwhile, EcoFirst saw its net profit decline from RM22.6 million in the financial year ended May 31, 2019 (FY2019) to RM17.1 million in FY2020, before it dropped further to RM13.6 million in FY2021. The company reported a net loss of RM2.1 million in the first quarter ended Aug 31, 2021 (1QFY2022).
The weaker financial performance was mainly attributed to the postponement of new property launches while there was no revenue from the property development segment, which continued to be negatively affected by the Covid-19 pandemic.
Nevertheless, sources say Chooi still sees long-term value in EcoFirst, particularly owing to the cheap land that the company bought a decade ago.
“Some of the land is in very strategic areas, for instance, in Ampang Ukay. He sees huge growth potential for EcoFirst, and now is the best time to buy when the property market is depressed,” says the real estate industry source.