KUALA LUMPUR (June 1): Takaso Resources Bhd has entered into a conditional Joint Venture Agreement (JVA) with SSPP Development Sdn Bhd (SSPP) in relation to a proposed mixed development on a parcel of land in Bandar Kuantan, Pahang.

Takaso (fundamental: 1.65; valuation: 0.3) told Bursa Malaysia in a filing today that it has entered into the deal via its 70%-owned Takaso Development (Kuantan) Sdn Bhd (TDKSB).

According to the baby products and condom maker, PASDEC Corporation Sdn Bhd is the registered proprietor of the land. The land is a Malay reserved land and is surrounded by matured shops and residential areas such as East Coast Mall, Zenith Hotel, Zenith Tower and Stadium Darul Makmur.

Under the JVA, SSPP will procure the land to be transferred to it, and convert the land from Malay reserved land to Non-Malay reserved land, as well as ensure the said Land is free of all encumbrances and third party interests, within six calendar months from the date of the JVA.

Upon completion of the JVA, Takaso foresees the profit contribution from the project to be 25% or more.

"It may result in a diversification in the business operations of Takaso, which Takaso will be seeking its shareholders' approval in due course," it added.

On the funding, Takaso said TDKSB shall be responsible to secure all financing and loan facilities required and/or necessary for the construction and completion of the project.

Takaso said the JV is inline with the company's strategy to grow and diversify its business operations to turn profitable, with sustainable growth.

The counter closed unchanged today at 48.5 sen, for a market capitalisation of RM99.09 million.

(Notes: 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.)