By TMR

MESTRON Holdings Bhd has entered into a head of agreement with China-based Zhongyu Yexing (Chengdu) Industrial Co Ltd for distribution of the Covid-19 vaccine in Malaysia.

The steel pole maker joins Yong Tai Bhd, Bintai Kinden Corp Bhd, Ho Wah Genting Bhd, Kanger International Bhd, K-Star Sports Ltd, Solution Group Bhd, Inix Technologies Holdings Bhd and MyEG Services Bhd in branching out into vaccine distribution in hopes for bumper profits.

Mestron shares have jumped by 380% to a 52-week high of 24 sen from a low of five sen in March last year. It was one of the top five actively traded counters on the ACE Market last Friday with 106.81 million shares exchanging hands.

In a recent exchange filing, Mestron said the two parties have jointly agreed to commence discussions and negotiations exclusively in good faith the details on the structure and terms of the proposed collaboration.

Mestron and Zhongyu are expected to finalise and enter into a definitive agreement within 30 days upon completion of the discussions and negotiations. Zhongyu is part of Sino Pharma

Group of Cos, which are mainly involved in the sale, distribution, marketing and promotion of the Covid-19 vaccine and other medical and pharmaceutical products.

Mestron MD Por Teong Eng said the company had obtained a clearance letter from the Ministry of Health to commence negotiation and cooperation with any companies from China for the importation, distribution, sale, marketing, use and application of the Covid-19 vaccine in Malaysia.

“We are currently in the middle of negotiating with Zhongyu on the details of our potential collaboration. Once we have firmed up the terms, we will submit an application to the National Pharmaceutical Regulatory Agency (NPRA) to register and get approval for the distribution of Covid-19 vaccine in Malaysia.

“Zhongyu, on the other hand, will provide all support to ensure Mestron obtains NPRA’s approval for the registration and distribution of Sinopharm CNBG Covid-19 vac- cine in Malaysia.

“Once we have obtained all the necessary approval, Zhongyu will supply the vaccine at a preliminary estimation of three million doses (1.5 million sets) to Mestron in stages,” he said.

The company is expected to invest up to RM20 million for the business venture, which will be funded via internally generated funds, bank loans and proceeds from private placement.

Shares of the ACE Market-listed counter closed at 21 sen last Friday, down by 4.55% or one sen, to give the company a market valuation of RM185.32 million.