My View

TEKSENG (7200) - A normal business decision turning into a PR disaster

Adam Khoo
Publish date: Wed, 05 Oct 2016, 05:45 PM
Sharing my view.

At any rate of measurement, a PLC losing 24% of it market value in 6 trading days is indeed a very huge disaster. It all started at Sep 26 when a TEKSENG subsidiary TS Solar issued a internal memo to reduce 180 head count from production line. This is a normal business decision for a manufacturing company. 

However, the internal memo has somehow leaked out to the public and turn into unwanted speculation that caused panic and dumping of the company stock. One will wonder why the company top management did not take this matter seriously and make an immediate "official clarification" after the leakage incident.

And added more to the puzzle, there is still no action as at today, at the 6th market trading day of the panic and even the company has lost 24% of it market value. Clearly the lacking of crisis management in PR has turn this very normal business practice into a real disaster, unless there is something that the public do not know.

By looking at the past 6 quarters performance of the company, one would expect TEKSENG to have a even better result for the latest quarter which ended at 30-9-16. TS Solar has recruited 400 new workers in Jun, even after the reduction of 180 head counts in Sep, the manufacturing output should still improve at the past 3 months. 

To TEKSENG, this is a big PR disaster, but to the investors who hold the company stock, they have suffered unnecessary huge losses. For others, the drastic adjustment in the share price may present an entry opportunity, anyway this is all depend on how one would analyse the whole incident before making any decision. 

Related Stocks
Market Buzz
Discussions
2 people like this. Showing 3 of 3 comments

Olga

7200 Tekseng - Free Fall or Money Fall From Sky
http://klse.i3investor.com/blogs/teksengbhd/105812.jsp

2016-10-05 19:59

Edmund See

Tek Seng only issued a short memo to Bursa to clarify the matter after their memo leaked out. They clearly underestimated the magnitude of the crisis, it show they are slow & not decisive enough in crisis management.

Transparency, on time & disassemble of appropriate information is paramount to a Public Listed Company (PLC). As a public listed company, they are responsible to thousand of investors, not one or two unhappy customer. The company should instead hold a proper press conference to clarify the matter.

Now the company not only losing substantial market value, the crisis also affecting the confidence of the whole investment community which include not only the individual investor, but also the fund manager, lender, investment bank, and even their business partner, supplier and customer.

2016-10-06 09:04

khphua25

This share going to Holland way...

2016-10-08 14:02

Post a Comment