Hot Stock HWGB rises 12% from 3-yr low after auto entry news

by **Cals** Thu 03 Oct 2013, 14:27

Hot Stock HWGB rises 12% from 3-yr low after auto entry news

Business & Markets 2013

Written by Ho Wah Foon of theedgemalaysia.com

Thursday, 03 October 2013 12:31

KUALA LUMPUR (Oct 3): Shares of HO WAH GENTING BHD [] [] (HWGB) rose in active trades after the company announced plan to acquire Rex Oriental Sdn Bhd for RM3 million to venture into the auto sector.

At 12.03 pm, the loss-making company’s share price rose 2.5 sen or 12% to 24 sen, from its three year lows, on trades of some 24 million shares. In earlier trades, it hit a high of 24.5 sen.

The net assets per share of the 7th most active stock stood at 14 sen as at end-June 2013.

“This stock has always attracted speculative play. Now with a piece of positive news, there is another opportunity for people to play the stock,” said Goh Kay Chong, senior remisier at SJ Securities Sdn Bhd.

Yesterday, HWGB informed the stock exchange it has entered into a share sale and purchase agreement to acquire all the shares in Rex Oriental.

The principal activity of ROSB is investment holding and its 70% owned subsidiary, Orient Sun Motors Sdn Bhd (OSM), is involved in trading in motor vehicles.

The deal will be satisfied via internally generated funds and borrowings of HWGB, which manufactures and trades wires and cables.

With OSM, the company has secured the distributorships of China automakers and gain a foothold to participate in the local auto industry with Chinese made vehicles, it added.

OSM also holds a franchise distributorship from Hebei Zhongxing Automobile Co Ltd, China (ZX Auto), allowing OSM to distribute in Malaysia all vehicle models manufactured by ZX Auto, said HWGB.