CEO Morning Brief

NH Foods Ceases to be Lay Hong’s Substantial Shareholder

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Publish date: Fri, 04 Oct 2024, 09:34 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (Oct 3): NH Foods Ltd, a joint venture (JV) partner of egg producer Lay Hong Bhd (KL:LAYHONG), has ceased to be the latter’s substantial shareholder after disposing of 62.32 million shares, or an 8.24% stake.

The shares were sold via an off-market transaction on Wednesday, the group's bourse filing on Thursday showed. While the selling price was not disclosed, based on Wednesday’s closing price of 40 sen, the stake could be valued at approximately RM24.93 million.

Following the disposal, NH Foods’ shareholding in Lay Hong has been reduced to 4.82% from 13.06% previously.

Founder and executive chairman Datuk Yap Hoong Chai is the largest shareholder of Lay Hong, holding direct and indirect stakes of 7.52% and 24.55% stake respectively.

In 2016, Lay Hong and NH Foods formed a 49:51 joint venture to produce halal food using Japanese technology, primarily for exports to the Middle East and Southeast Asia.

However, NH Foods last year decided to exit the Malaysia market. Lay Hong bought out NH Food’s stake in the JV — NHF Manufacturing (M) Bhd — for RM1, after considering NHF’s unaudited net assets as at Feb 28, 2023 was in the negative of RM21.2 million.

Lay Hong recently posted a more than threefold jump in net profit to RM13.39 million for the first quarter ended June 30, 2024 (1QFY2025) compared with RM4.02 million a year ago, partly due to the government subsidies.

Revenue grew 6.12% year-on-year to RM273.82 million from RM258.02 million, driven by stronger contributions from its integrated livestock farming and food manufacturing segments.

Shares of Lay Hong closed one sen or 2.5% lower at 39 sen on Thursday, giving the company a market capitalisation of RM291.62 million. Year-to-date, the stock has appreciated 30%.

Source: TheEdge - 4 Oct 2024

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