Sell or cut loss first and collect when cheap price, already trap lots of retailers at 0.195-0.200 even push also won't exceed this price range to let retailers run
KUALA LUMPUR: Mexter Technology Bhd’s share price recently tripled from seven sen to a five-year high of 21 sen in just one week from May 26 to June 2.
The surge was curious considering Mexter has been loss-making for the past four financial years and its ballooning accumulated losses, which were RM22.88 million as at March 31, have eaten into its shareholders’ funds.
Interestingly, there were changes in Mexter’s shareholding when its share price was on the steep climb.
On May 27, Bursa Malaysia filings showed that Mexter non-executive director Kuan Khian Leng sold 51.55 million shares or a 26.2% stake in the company at 15 sen per share through an off-market deal. Subsequently, he ceased to be the company’s largest shareholder.
Kuan, the son of Fajarbaru Builder Group Bhd chairman Tan Sri Kuan Peng Ching @ Kuan Peng Soon, then resigned from Mexter’s board on June 1.
Meanwhile, Mexter managing director Ivan Sia Teck Fatt disposed of 10 million shares, or a 5.08% stake, on the same day and at the same price. Sia was left with 11.22 million shares or a 5.7% stake in Mexter after the share sale.
In total, Kuan and Sia sold 61.55 million shares or a 31.2% stake in total on May 27.
Lim Yin Chow bought 55.85 million shares, representing a 28.4% stake, through his private investment vehicle LYC Capital Sdn Bhd from the duo.
However, it is not known who has bought the remaining 2.8% stake.
The changes in shareholding prompted many to wonder why Lim wanted to control the loss-making company, which derives its earnings from mobile messaging services.
Did he intend to inject healthcare service business, an area that Lim is familiar with, into Mexter?
Lim was credited as a co-founder of the HSC Medical Centre in Kuala Lumpur with his then-business partner Dr Soo Chee Siong. It was reported that Lim had since divested his stake in HSC.
A company search on LYC Capital states that the company is in the business of providing advisers, consultants and trainers in the medical sector and for health products. LYC Capital was incorporated in 2014, and its two shareholders are Lim and his wife Chen Kang Hui.
Another development that the authorities would be taking note of is the appointment of a new chairman of the audit committee of Mexter, after the resignation of Andrew Su Meng Kit on June 17.
In Mexter’s annual general meeting on June 16, shareholders passed a resolution to retain Su as a senior independent non-executive director of Mexter.
However, the very next day, Su resigned as independent and non-executive director, and as chairman of the audit committee, with the reason that he had been an independent director for more than nine years and it was good for the company to appoint someone new to the role.
It is not known what Lim has in the pipeline for Mexter after he takes over. But one thing for sure is that Lim will have to revive Mexter’s financial health.
The company’s shareholders’ funds amounted to RM10.53 million as at March 31, which were equivalent to 53.5% of its paid-up share capital of RM19.68 million. This is not that far from the minimum requirement of at least 50% under Bursa Malaysia’s ACE Market listing rules.
Should Mexter remain in the red, it would be on the verge of being categorised as a Guidance Note 3 company, which shareholders’ equity is equal to or less than 50% of the issued and paid-up capital of the corporation. It will have to regularise its financials under the listing rules.
Mexter has recently announced a change in its financial year end from Dec 31, 2016 to March 31, 2017.
After three consecutive quarters of losses, Mexter reported a net profit of RM60,000, on revenue of RM11.2 million, for the quarter ended March 31, which the company attributed to higher sales from its mobile services division following a stronger market demand.
Lim gonna inject healthcare biz into Mexter. According to Star Newspaper, it reveals that HSC Healthcare made a profit of RM62.5mil on revenue of RM265.1mil for its financial year ended Dec 31, 2014. Mexter's market cap as of today is at RM38M. You can predict how high it can go soon. :)
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Wei Jie Yau
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Posted by Wei Jie Yau > 2016-06-21 09:57 | Report Abuse
Crazy, can buy?