Tek Seng continues to draw keen trading interest

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Tek Seng continues to draw keen trading interest
By Ahmad Naqib Idris Adzman Shah / TheEdge Markets.com | October 23, 2014 : 4:41 PM MYT

KUALA LUMPUR (October 23): PVC products manufacturer Tek Seng Holdings Bhd has drawn keen interest today with some 27 million shares traded so far, making it the fourth most actively traded counter on Bursa Malaysia.

At 4.12pm, Tek Seng was unchanged at 84.5 sen, translating to a market capitalisation of RM202.80 million.

The company was highlighted by TheEdge Markets.com as one of the stocks with momentum on Oct 21, 2014.

According to TheEdge Financial Daily, the trading momentum on the stock soared before and after the company announced it had, on Sept 11, entered into a memorandum of understanding (MOU) with Taiwan-listed Solartech Energy Corp (SEC), which would invest RM100 million in Tek Seng’s 86.1%-owned subsidiary TS Solartech.

The company’s share price had doubled over the past two months, following news of the proposed investment.

The investment is large relative to TS Solartech’s net assets of RM50.02 million and Tek Seng’s market capitalisation of RM199.2 million. However, it is unclear what its eventual stake in the solar business will be.

There had been no new developments announced since then. And it is worth noting that the agreement is only an MOU at this stage.

Year-to-date, the counter has gained 56.5 sen or 195% since July.

In terms of financials, Tek Seng’s net profit surged to RM9.83 million for its second quarter ended June 30, 2014, from RM627,000 in the same quarter the year before, while revenue grew to RM70.45 million from RM53.56 million.