By NUR HAZIQAH A MALEK
BSL Corp Bhd’s shares continue to edge to new historic highs as the analysts warn the jump in value is not backed by any major fundamental change in the counter’s business or financials.
BSL shares closed limit-up or 44 sen or 30% higher yesterday at RM1.92 a share, giving the metal stamping and printing circuit board (PCB) assembly concern a market capitalisation of RM188 million, a vast jump in value for a stock that was valued at 32.5 sen a year ago.
The exchange issued an unusual market activity (UMA) notice on the counter yesterday after the price surge but BSL’s management stated it was not aware of any reason for the price action except for the corporate announcement made in the recent past.
BSL’s stock price has limit-up twice in the past two trading weeks after the company announced it had inked a memorandum of understanding (MoU) to acquire a Singapore-based tech company, SD Unify Pte Ltd last Monday.
“The price jump has been triggered by the MoU news but investors need to be aware the current price is well above its takeover offer price of RM1.15 a share. So don’t be surprised if profit-taking ensues at some point,” a chartist with a local brokerage warned.
He added the price action in BSL shares is helped partly by the low number of issued shares at about 98 million.
The jump in BSL share price comes as major shareholder BCM Alliance Bhd acquired shares in the open market according to the former’s exchange filings.
BSL recently announced multiple proposals including a proposed share split of everyone existing ordinary share in the company into two shares and a private placement of up to 58.8 million shares to independent third-party investors.
The proposals also included a possible bonus issuance of up to 127.4 million free warrants in BSL on the basis of one war- rant for every two shares held and the establishment of an employees’ share option scheme of up to 15% of the total issued shares for eligible directors and employees of the company and its subsidiaries.
On Aug 20, 2021, the group had announced its financial report for the third quarter ended May 30, 2021 (3Q21), reporting a net profit of RM1.05 million as against a net loss of RM2.31 million reported in the corresponding quarter the previous year.
Its revenue had also doubled, going from RM20.02 million in 3Q20 to RM43.64 million in 4Q21.
In its exchange filing, BSL stated that its core business was more encouraging despite the impact of the movement control order, while its renewable energy segment posted higher sales, offset with slightly higher operating loss before interest.
The group had undergone various changes in the board, audit committee, nomination committee and remuneration committee on Aug 5, as well as changes in sub-shareholders in June between which the group’s share price traded from RM1.14 to RM1.15.
On June 23, the group received an unconditional mandatory takeover from Sanichi Technology Bhd MD Datuk Seri Dr Pang Chow Huat and PNE PCB Bhd ED Ho Jien Shiung.
This comes after the duo acquired a total stake of 51.72% in a metal stamping group Esteem Role Sdn Bhd via direct business transactions for RM57.48 million cash and later issued the takeover notice to acquire the remaining shares in BSL Corp at RM1.15 per share.
According to BSLCorp, said joint offerors intend to maintain the group’s listing status on Bursa Malaysia Securities Bhd’s Main Market.
The independent advisor to BSL’s board had termed the offer fair and reasonable and for shareholders to accept the bid.
On May 10, the group issued a temporary cessation of operations due to Covid- 19 cases, whereby its manufacturing facility located in Rawang had staff tested positive for the virus after a screening.
The company had to cease its operations for two days starting on May 11, 2021 to allow thorough disinfection work to be carried on the office premises in Rawang, and its affected workers had to be placed under quarantine.
In January, BSL received an UMA query from Bursa Malaysia after a sharp rise in its share price and trading volume.
Between Jan 6 and Jan 7, the group’s share price surged as much as 30 sen or 69.8% and reached 73 sen, with a market capitalisation of RM62.23 million on that day, with some 7.86 million shares done during the trading session.