Capital markets executive summary | Tue 19 Dec 2023

Capital markets executive summary | Tue 19 Dec 2023

Scoop buys Apollo controlling shareholding to trigger MGO

Keynote Capital Sdn Bhd signed a share sale agreement with Scoop Capital Sdn Bhd to sell its 41.05m shares or 51.31% in Apollo Food Holdings Bhd for RM238.08m cash. The transfer will be effected today. The price of RM5.80 per share is at a 7.4% premium to the last closing price of RM5.40. Scoop Capital is obligated to make an unconditional mandatory takeover offer for the remaining 48.49% at RM5.80 per share, although it intends to maintain Apollo’s listing status on the Main Market. Based on a trailing earnings per share (EPS) of 44.02 sen, Apollo is valued at a price-to-earnings ratio (PER) of 13.18 times. In comparison, Kawan Food, which makes frozen food, is trading at a PER of 22.34 times. Hup Seng, which makes biscuits, is trading at a PER of 14.32 times. Apollo makes compound chocolates, chocolate confectionery products and layer cakes for the local and overseas markets. Keynote is owned by Singaporean brothers Liang Chiang Heng and Liang Kim Poh. Scoop Capital, which is owned by Datuk Cheah See Yeong and his wife, holds 100% in Golden Scoop Sdn Bhd, which is the master franchisee for Baskin-Robbins in Malaysia and Singapore.

Critical Holdings gains 62.86% on ACE Market listing

The mechanical, electrical and process (MEP) utilities engineering company closed at 57 sen, up from the IPO price of 35 sen. It was the 4th most active stock with 136.7m shares traded. The counter is the 12th best performing IPO from among 31 new stocks. The total proceeds were RM26.02m, which will be used for acquiring a new regional office (RM6m), capital expenditure (RM1.6m), expansion of its sales and technical team (RM4.5m), working capital (RM9.92m) and listing expenses (RM4m). The company provides MEP engineering solutions and MEP maintenance and services for critical facilities, which are plant rooms, cleanrooms and data centres. Unbilled order book of RM264.6m at 5 Oct should provide earnings visibility until FY2026. RM225.8m unbilled orders are from contracts in Penang and Kedah, while RM38.7m are from Selangor, Kuala Lumpur and Johor.
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APB Resources buys 10.41% of Globetronics

APB Resources Bhd, which fabricates specialised design process equipment, is acquiring 70m shares in Globetronics Technology Bhd, a Penang-based semiconductor manufacturer, for RM140m cash. The price of RM2 per share is a 16% premium to Globetronics’ closing price of RM1.72. APB Resources will become the 2nd largest shareholder. The shares are being acquired from General Produce Agency Sdn Bhd and Ng Kweng Chong Holdings Sdn Bhd, both owned by the founding family. APB’s purchase, which is premised on the growth potential of the electrical and electronics market in Malaysia, is subject to its shareholders’ approval at an extraordinary general meeting (EGM) to be convened. APB Resources has cash and cash equivalent of RM59.71m at end-Sep 2023. The counter closed at RM2.68.

Sunway REIT buys Penang industrial property

RHB Trustees Bhd, the trustee of the real estate investment trust, signed a conditional sale and purchase agreement with Best Corridor Venture Sdn Bhd for the 307,487 square feet gross floor area industrial property in Bukit Tengah Industrial Park at a price of RM66.8m. It is located on 4.21 hectares of leasehold land with tenure expiring on 22 Oct 2052, which will be extended to 60 years after the completion of the acquisition. The property is fully tenanted by anchor tenant Premium Sound Solutions, which is a Belgian sound products manufacturer, a Japanese logistics company and an American information management services company. Initial net property income yield will be 7.6%. The purchase price, which will be funded by the REIT’s existing debt facilities, will be completed in 3Q2024. It is Sunway REIT’s 2nd proposed acquisition in 2023 and the 3rd industrial property in its portfolio. The REIT’s Transcend 2027 aims to raise the “services, industrial and others” segment to 20%-30% of property value by 2027. The counter closed at RM1.55.

MyeongDong Topokki plans Bursa listing

Malaysia’s homegrown fast-casual Korean restaurant chain is considering listing on Bursa Malaysia as early as 2026 to enable the company to enlarge its investor base. Its regional expansion for 2024 targets 80 outlets in Malaysia, 15 in Indonesia and 2 in Brunei. The company may enter the Philippine market after its foothold in Indonesia stabilises. For Indonesia, the company will set up new stores in shop lots instead of shopping malls, in line with consumer trends. The company is sensitive towards cultural nuances which influence menu offerings. For example, chicken ramen is the best seller in Malaysia, while Indonesians prefer chicken bulgogi.