Dataprep’s shares rise on rights issue, telco plans

by NUR HAZIQAH A MALEK / pic credit:

DATAPREP Holdings Bhd’s share price rally continued for the fourth trading day with the counter rising 18.5 sen or 29.37% to 81.5 sen, taking gains for the week to nearly 400% from 16.5 sen on Feb 11.

The rally came on the back of the company stating, in an exchange filing, its plan to undertake a private placement to help finance the growth plans for its telecommunications business.

The counter was heavily traded yesterday with some 220 million shares exchanging hands.

The trading volume registered on Feb 16 marked a new high for the company at 380.9 million shares.

Its price hit a high of 87.5 sen in intraday trade before closing at 81.5 sen, which gives the company a market valuation of RM491.12 million. Its substantial shareholder, Tan Sri Muhammad Ikmal Opat Abdullah (picture), sold 11.11 million shares on Tuesday in an off-market deal which took his stake to 54.21%, according to an exchange filing yesterday.

The rally in Dataprep’s shares was ignited after the company announced it had fulfilled conditions to acquire a 51% stake in RIDAA Associates Sdn Bhd on Feb 15. The acquisition is aimed at expanding the group’s multimedia and communication revenue stream.

The following day, Dataprep announced its plan to undertake a private placement of 138.6 million of its ordinary shares, which represent 20% of the total number of issues shared, to independent third-party investors. The issue price will be set at a later date.

Dataprep, in its third-quarter ended June 30, 2020 (3Q20), stated the acquisition will allow the group to pursue opportunities to build, instal, operate, maintain and manage telecommunication tower assets in Malaysia.

Its key focus is to construct at least 1,000 towers throughout the country based on the secured right of ways and subsequently lease them to telecommunication companies (telco).

Its venture into the telecommunication towers project is aligned with the National Fiberisation and Connectivity Plan for the foundation of the country’s digital infrastructure transition to 5G technology.

In addition to its takeover plan, Dataprep’s share price has been boosted by the developments linked to Widad Business Group Sdn Bhd (WBG).

WBG, also owned by Muhammad Ikmal, recently announced a project worth RM40 billion called “The [email protected]” in Langkawi, which could sustain the group for the next 15 to 20 years.

The development will comprise tourism components including five and six-star hotels and resorts, as well as international amenities such as golf course and office complex.

The development is expected to elevate the island’s status into a world-renowned tourism destination and spur the local economy.

Dataprep extended its net loss in 3Q20 to RM2.29 million from RM767,000 the year prior on a lower revenue of RM8.55 million. On a year-to-date basis, the company posted a net loss of RM6.76 million on a revenue of RM23.63 million.