KUALA LUMPUR (Dec 7): Shares in Yong Tai Bhd jumped 17.8% in active trade this morning after the property developer firm announced its Covid-19 vaccine development and distribution deals with China-based Shenzhen Kangtai Biological Products Co Ltd (SZKT).

As at 11.09am, the group had risen 6.5 sen to 43 sen, valuing it at RM441.91 million. It saw some 344.34 million shares traded — making it the most actively traded stock in Bursa Malaysia's morning trading session as at the time of writing.

Year to date, the counter has surged 169% from 16 sen.

To recap, Yong Tai said it will be SZKT's partner in Malaysia to conduct Phase III clinical trials and exclusive commercialisation of the Covid-19 vaccine.

The group also added that it has entered into an advisory and service agreement with Klinsel Sdn Bhd in order to support the collaboration. This means Yong Tai appointed Klinsel as the contract research organisation for the proposed clinical study of the Covid-19 vaccine to be conducted in Malaysia.

Given the current operating segment environment in which Encore Melaka remains shuttered and the property development segment seeing its launches curtailed owing to the need to manage cash flows, Public Invest Research's Ching Weng Jin said in a note today that this current move to diversify its revenue makes sense.

“It is still very early days however, though we concede the rewards are potentially very lucrative should this venture ultimately prove successful,” said the analyst.

Upon successful conclusion of the Phase II clinical trial or emergency usage approval being obtained in Malaysia, Ching noted that the parties involved plan to cooperate on a vaccine procurement program of approximately 100 million doses over a five-year period, with the committed quantity for the first three years no less than 20 million doses per annum.

Furthermore, he said Yong Tai will be granted a five-year exclusive commercial right to distribute the vaccine in Malaysia, with an option for a further five-year renewal.

Public Invest Research has maintained its "neutral" call on the group, with a higher target price of 28 sen from 14 sen previously on lower discount rate.