Friday 29 Mar 2024
By
main news image

insiderasia-logo_theedgemarkets

MAA Holdings Bhd
MAA Group Bhd (MAAG) is principally engaged in the Takaful, general Insurance and prepaid card businesses. In September 2011, the company sold its interest in its then core business, MAA Assurance, to Zurich Insurance Group Ltd, resulting in MAAG being a cash-rich company, but also one classified under Practice Note 17 (PN17) of the listing requirements for ceasing its major business.

To cease its classification of PN17, MAAG would need to submit a regularisation plan. Options open to the company include investing more of its large cash pile to grow the current operations, acquiring new businesses or assets, or returning excess cash to shareholders.

MAAG is currently trading well below its net cash backing, making it a potentially attractive M&A or dividend play. The company has net cash of RM317.87 million as at 30 June 2014, some 65% more than its current market capitalisation of RM192.77 million, based on its last traded stock price of RM0.64.

The stock is also trading at a price-to-book of just 0.45 times, with cash and cash equivalents accounting for 61% of total assets. On its current smaller scale of operations, MAAG posted net profit of RM2 million on revenue of RM335.7 million for the first half of 2014.

In the wake of Melewar Industrial Group Berhad’s disposal of Melewar Steel Tube Sdn Bhd to Mycron Steel Berhad, both members of the Melewar Group, the question is if yet another member of Melewar Group — MAAG — would be conducting a corporate exercise soon.

MAA-Holdings_theedgemarkets

 

This article first appeared in The Edge Financial Daily, on November 18, 2014.

      Print
      Text Size
      Share