Hextar Global (5151)

Cut to the chase

4 reasons Hextar could be the next stock to rally as early as tomorrow:--

1. Major shareholder Eddie Ong, via his holding company, Hextar Holdings Sdn Bhd, acquired 18.3m shares in the past week, raising his stake by a whopping 3.7% to 58% to 62%.  Ironically, this insider buying is a week before the listing of its super-hot IPO Pekat Group tomorrow (23 Jun  2021). Hextar owns 25% of Pekat before IPO and will still hold a 20% stake post-IPO. Pekat was 76% oversubscribed - RM800m of demand were chasing after RM10m of Pekat’s shares on sale!

As Axcapital’s mantra goes, “When insiders buy big, we must buy along!”

2. What happens when Eddie Ong buys his own stock? The last time Eddie Ong raised his stake heavily in Hextar was in early Jan 2021, when he bought 37m shares at 86 sen.  Hextar rallied 60% to a new high of RM1.40 within 2 months after that purchase.

A similar move this time could take the stock up to RM2.50!

3. Investors have forgotten that Hextar’s 3-for-5 bonus issue goes ex this Friday (25 June 2021).

Bonus issues are hot catalysts driving stock prices in the current bullish environment!

4. Hextar has secured the necessary financing from OCBC to complete the acquisition of Chempro. This will add 30% profit growth to its next financial year. The agrichemicals business is booming owing to the robust CPO environment and the upcoming National Food Security agenda by the government. Chempro’s cleaning business is benefitting from the Covid-pandemic.  Hextar pays a decent dividend yield of 2.5% (higher than Malaysia’s Fixed Deposit rate of 1.7%), its ROE (before Chempro) of 22% is stellar and a forward P/E of 22x is undemanding for a growth stock.

Fundamentally, Hextar is a great growth stock in the right space!

Disclaimer: The views presented  herin does not constitute a recommendation or solicitation to buy or sell the securities mentioned herein. All information and opinions expressed are subject to change without notice. The publisher may from time to time have a position in the securities mentioned. This publication is based on pulicly available information and any information from sources are believed to be reliable but we do not make any presentations as to its accuracy or completeness.