by NUR HAZIQAH A MALEK / pic credit: ANNUAL REPORT
MALAYSIAN Genomics Resource Centre Bhd (MGRC) share price rally reflects more of its small share base rather than fundamental change in business earnings prospects.
Despite some selling by major shareholders, the stock closed at a fresh historic high of RM1.93 yesterday, up seven sen for the day, which took its market cap to RM228 million.
“The share base is small, and I suspect the stock price is inching towards the RM2 level next. The company has some 118 million shares outstanding with 50 million in float — it looks to have been cornered,” a chartist with a local brokerage said.
MGRC was priced at 36.5 sen a year ago and has steadily risen to RM1.56 on July 14 before this latest move thrust up into uncharted territory.
Should the price break past and stay above the RM2 level, he expects the next resistance level to be at about RM2.10. Support to the downside is put at RM1.80.
The most recent notable change in the group’s shares were changes in director Datuk Munirah Abdul Hamid’s interest on July 15, 2021, after she sold 694,000 shares in the open market at a consideration of RM1.11 million.
There were also changes in substantial shareholders’ interests, namely an acquisition of one million shares by Pixelvest Sdn Bhd on July 5 and disposal by I Concept Global Growth Fund on July 1 for the same amount.
According to a filing to Bursa Malaysia on July 1, MGRC is still evaluating the options available to regularise its affected listed corporation status.
“The company has six months until Dec 23, 2021 to submit a regularisation plan to the relevant authorities for approval and will make further announcements in relation to any latest development in accordance with the requirements under Rule 8.03A of the Listing Requirements,” it said in the monthly announcement.
This followed the first announcement which was made on Dec 24, 2019, for being classified as an affected listed corporation.
For the third quarter ended March 31, 2021 (3Q20), MGRC posted a net profit of RM200,000 against the previous net loss of RM1.66 million.
Its revenue for the period was at RM1.63 million, higher than RM308,000 it made for the same period last year, due to higher orders from genetic screening services and recognition of the genome sequencing and analysis services process.
For the cumulative nine months, net loss amounted to RM2.19 million on the back of RM1.85 million in revenue as opposed to a net profit of RM22.54 million and revenue of RM5.45 million for the 9M20.
This was due to the absence of gain arising from subsidiaries’ disposal and also the lack of dividend income respectively, the company’s exchange filing noted.
MGRC has recently diversified its business to include the biopharmaceutical and healthcare products and services, in which its cell laboratory’s planning and design has commenced in December 2020 and applied for approval to the National Pharmaceutical Regulatory Agency.