Received another document from my media friend, this time looks like KANGER is ready to back into black?

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Kanger confident of returning to the black in FY2022,

driven by new construction business

Kuala Lumpur, 3 August 2021 – Bursa Malaysia’s ACE Market-listed Kanger International Berhad’s (“Kanger”, “the Group” or “the Company”) is confident of returning to the black in the coming financial year ended 31 March 2022 (FYE 2022), driven by the Group’s new construction division.

Over the past one year, Kanger has embarked on several exercises to build a resilient business that focuses on growth and sustainability. From being a manufacturer of bamboo flooring materials, the Group expanded its source of earnings into a new business; the construction segment.

At present, the Group has secured construction projects which have a total orderbook of approximately RM1 billion.

“Moving forward, the Group will expand its construction business by undertaking building construction, civil engineering and project management contracts as a main contractor or sub contractor. We also aim to secure the Grade 7 contractor license from the Construction Industry Development Board (“CIDB”) which will enable us to undertake construction projects of any value,” Kanger Executive Director, Mr. Steven Kuah Choon Ching (柯 俊 敬) said.

To enhance the Group’s competitive edge in the construction business, Kanger’s acquisition of a 51% stake in building materials supplier, Sung Master Holdings Sdn Bhd (“Sung Master”) will contribute positively to the Group in terms of financial performance as well operational synergies.

Sung Master is primarily involved in the sales and trading of building materials, which include, timber flooring, tiles, bulk cement, concrete, locksets and sanitary ware. Its clients comprise of property and construction players as well as engineering consultants.

By leveraging on Sung Master’s existing suppliers, Kanger can source for building material supplies at relatively competitive prices. This will lead to improved cost efficiencies when tendering for new construction contracts.

Mr. Steven Kuah Choon Ching added, “The acquisition of Sung Master is earnings-accretive and will bring an immediate positive impact to the Group’s financial performance. Sung Master has consistently delivered a profitable performance over the past 3 financial years from FYE 31 January 2018 up to the audited 17-month Financial Period Ended (“FPE”) 30 June 2020 and latest unaudited 10-month FPE 30 April 2021. Moreover, Sung Master even paid out dividends totalling RM25.0 million during this period.”

“For the latest 10-month FPE 30 April 2021, Sung Master reported an unaudited profit after tax of RM11.8 million against revenue of RM76.0 million. For the FYE 30 June 2021, Sung Master is estimated to deliver a strong profit after tax and revenue of approximately RM20.0 million and RM115.0 million respectively.”

The acquisition of Sung Master has been approved by shareholders and the purchase is expected to be completed within the next month. Thereafter, the consolidation of Sung Master’s financial performance will contribute positively to Kanger’s profitability and cashflow position.

“Moving forward, we are confident that our new construction business will be a significant growth driver in our Group’s transformation journey. We will be actively tendering for new construction projects and aim to grow the construction business to be a significant business pillar to the Group.”

“Over the near-term, the progress billing of our on-going construction projects which have a total orderbook of approximately RM1 billion and earnings contribution from Sung Master will positively impact our Group’s earnings, thus enhancing overall shareholder value.”

To strengthen the Group’s financial position and capital base, Kanger announced the proposal for a renounceable rights issue with warrants on the basis of one rights share for every existing share, together with one free detachable warrant for every one rights share subscribed. At an issue price of RM0.06 per rights share, the exercise could raise gross proceeds of up to RM20.0 million under the minimum case scenario and RM171.7 million under the maximum case scenario.

“The rights issue will enable shareholders to increase participation in the future direction of the Group as we embark on investments and acquisitions that will propel the Group to greater heights.”

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Key Point:

“For the latest 10-month FPE 30 April 2021, Sung Master reported an unaudited profit after tax of RM11.8 million against revenue of RM76.0 million. For the FYE 30 June 2021, Sung Master is estimated to deliver a strong profit after tax and revenue of approximately RM20.0 million and RM115.0 million respectively.”

Seriously, KANGER should be 8 cents soon!