Mitsui emerges as LGMS’ substantial shareholder with 25% stake

KUALA LUMPUR (April 26): Japan's Mitsui & Co Ltd has surfaced as a substantial shareholder of LGMS Bhd, with a 25% stake or 114 million shares in the ACE Market-listed cybersecurity specialist.

Mitsui emerged as a substantial shareholder after it acquired 104.88 million shares on Wednesday (April 26), according to LGMS’ filing with Bursa Malaysia.

The filing did not reveal the seller's name and transaction price for this block of shares.

According to Bloomberg data, LGMS’ largest shareholders are executive chairman Fong Choong Fook (with a 53.86% stake) followed by his wife Goh Soon Sei (16.1% stake). Goh also sits on the group’s boardroom as executive director.

The latest acquistion by Mitsui is likely to have made the sogo shosha the second largest shareholder in LGMS.

LGMS also released its audited financial accounts on Wednesday, which showed a 12% growth in net profit to RM11.55 million for the financial year ended Dec 31, 2022 (FY2022) from RM10.32 million in FY2021, driven by more contracts obtained for cybersecurity services.

The higher number of contracts also led to a 16% increase in revenue to RM32.79 million from RM28.26 million in FY2021.

In its 4QFY2022 quarterly disclosure, LGMS commented that demand for cybersecurity offerings had increased in recent years given the acceleration of the usage of internet and adoption of digital medium due to Covid-19 and subsequent lockdown measures imposed.

“The group believes that the market outlook and prospects of the cybersecurity market in Malaysia and neighbouring countries in Southeast Asia remain positive as corporations and businesses are moving towards digital transformation and prioritizing their capital expenditure on cybersecurity with the aim to safeguard their customer data and operations.

“The increasing demand for cybersecurity services will create opportunities to the cybersecurity market and by leveraging the Group’s market position and branding, the group is poised to benefit from the growing demands for such services,” it said.

LGMS, which was listed in June last year, said it has also begun to explore opportunities for expansion with proceeds raised from its initial public offering (IPO).

The stock closed three sen or 2.6% lower at RM1.12 on Wednesday, giving the group a market capitalisation of RM510.72 million.

This compares to the group’s IPO price of 50 sen and its peak of RM1.41 in September last year.