KUALA LUMPUR (May 10): Tomei Consolidated Bhd is not planning to pare down its shareholding in its newly listed jewellery manufacturing arm YX Precious Metals Bhd, despite the unit's share price appreciation and the lapse of a six-month moratorium on share sales.
“We still have a [45%] moratorium, but no, we are not planning to sell [shares in YX Precious Metals],” said Tomei managing director Datuk Ng Yih Pyng, who also sits on the board of YX Precious Metals as a non-executive director.
YX Precious Metals, which was listed on the ACE Market in May last year, is 73%-controlled by Tomei and the Ng family, leaving just 27% free float, slightly above the minimum requirement of 25%.
The initial public offering (IPO) consisted of a share sales moratorium on Tomei’s 70% stake for the first six-month period, and 45% for the second six-month period.
Shares in YX Precious Metals were trading unchanged at 32.5 sen at Wednesday's (May 10) afternoon market break, equivalent to a 16% premium to its IPO price of 28 sen last year, giving it a market capitalisation of RM120.95 million.
Tomei, meanwhile, had gained 34% year-to-date, settling at RM1.34 at market break, valuing it at RM185.72 million.
Speaking to reporters after YX Precious Metals’ annual general meeting on Wednesday, its managing director Ng Sheau Chyn, who is the sister of Yih Pyng, expects the group’s sales to likely be sustained by persistent safe haven demand amid global economic uncertainties, including the regional banking distress in the US, Russian-Ukraine war, and inflationary pressures.
“Well, for profitability, we always mark to market price, and whenever we sell, we buy back, so in a way, higher gold prices will not really translate into a lot of additional profits.
“But on the other hand, gold prices look very stable and going higher, so I think investment will always be there. In that sense, it’s helpful to the business,” she said, adding that gold prices would likely stay within the range of US$1,900 to US$2,100.
Sheau Chyn said elevated gold prices would bode well for the company’s strategy in increasing its focus on the hollow gold jewellery range, which is more affordable compared to traditional solid gold products.
“Gold prices are very high. With a budget of RM5,000, last time you could buy a chunky item, but now it becomes small. We have to make it hollow, and the perceived value is higher. Hollow gold is a trend,” she commented when asked about the impact of increasing gold prices.
Sheau Chyn also said the management is looking to improve the company’s products by importing more technical know-how from countries like Italy and Türkiye in developing hollow gold products.
“Nowadays, there are actually already a lot of hollow products in the market, but the designs are more or less similar. Quality-wise, [we also] feel that there is still room for improvements. We are looking towards further collaboration and machinery improvement in this area.
“We have seen that in Italy, Türkiye and even China, they have a certain range of products that we don’t see local manufacturers doing, and that is an area we are exploring at this moment. It's not just machinery, but also manufacturing know-how,” she explained.