Cancellation of sand deals – upside or downside? (AGESON BERHAD)

Dated 14^th January 2022, AGESON had released something critical to the investment public, which is the update on the status on the sand deals. And as the title obviously stated, all the sand deals had been mutually terminated.

Back on 22^nd April 2020, the company’s property development and construction business had faced a huge challenge, which is the COVID-19. Unlike other property developer or construction player, the company decided to step out of their comfort zone and venture into the sand business to diversify and expand their income.

And now, due to the commercial viability, which we can see from the increase in costs of shipping had no longer make sense, the company decided to halt the sand deals.

I understand that some of the investors might taken this as a negative surprise, but do you, as an investor truly want a company to add on a potentially loss-making venture?

I doubt so.

So, with the safe exit from the sand deals by AGES, investor should not take this a downside, but instead, it allows the company to focus their resources back onto the property development and construction segment, which is obviously recovering now.

I look forward for a steep rebound in the share price for AGES.