KUALA LUMPUR (Sept 12): Tek Seng Holdings Bhd rose as much as 4% after the polyvinyl chloride product manufacturer announced its planned diversification into the solar energy business.
Tek Seng, which climbed as much as three sen to 87.5 sen, reduced gains to settle at 85.5 sen at 12.30pm. Some 28 million shares changed hands, making the stock the eighth most-active entity across the Bursa Malaysia.
The FBM KLCI fell 3.1 points or 0.17% to 1,863.01.
Yesterday Tek Seng said its 86.1%-owned subsidiary, TS Solartech Sdn Bhd, had entered into a memorandum of understanding (MOU) with Taiwan-listed Solartech Energy Corp (SEC) for the purpose of a “strategic alliance”.
According to the filing with Bursa Malaysia, SEC intends to invest RM100 million in TS Solartech.
Tek Seng is also the subject of an unusual market activity (UMA) query by exchange regulator Bursa Malaysia yesterday.
Bursa had queried Tek Seng on the recent rise in its share price and volume. Tek Seng's share price had more than doubled from about 40 sen at the beginning of August to
yesterday’s price of 84.5 sen.
Today, Tek Seng said the rise its share price and volume could be due to the company's MOU with SEC.
"We would like to draw your attention to the announcement made on 11 September, 2014, in respect of the Memorandum of Understanding between Tek Seng Holdings Berhad and Solartech Energy Corp," it said.
However, remisiers said Tek Seng's share price movement could be due to its recent second quarter earnings announcement. Tek Seng's net profit grew by more than 15 times to RM9.83 million from RM627,000 in the corresponding quarter last year.
“The stock is now trading at 14 times P/E, which is justifiable given its results. Also, there has been an announcement on an acquisition, so that may have been a driver as well,” a remisier said.