Hot Stock Chin Well rises 4.05% on upcoming full consolidation of CW Vietnam's earnings

by **Cals** Wed 21 Jan 2015, 02:51

Hot Stock
Chin Well rises 4.05% on upcoming full consolidation of CW Vietnam's earnings

By Supriya Surendran / theedgemarkets.com | January 20, 2015 : 11:33 AM MYT

KUALA LUMPUR(Jan 20): Chin Well Holdings Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) (fundamental:2.1; valuation: 2.4) saw its share price rose as much as 4.05%, or 6 sen, on news it was poised to fully consolidate the earnings of its subsidiary Chin Well Fasteners (Vietnam) Co Ltd (CW Vietnam) in the second half of its financial year ending June 30, 2015(2HFY15).

This follows Bursa Malaysia’s approval yesterday for the acquisition of the remaining 40% it does not already own in the unit. Chin Well will acquire the 40% interest by acquiring the entire share capital of Asia Angel Holding Ltd, which owns the stake.

The acquisition will see the carbon steel fastener manufacturer forking out RM47.5million for Asia Angel, which is to be satisfied by the issuance of 27 million new Chin Well shares at RM1.45 per share and a cash payment of RM8.3million.

The group will also assume net advances from the vendors of Asia Angel amounting to RM44.5million.

The acquisition is said to be timely for the group to leverage on the strong demand for do-it-yourself fasteners in Europe and the United States, which will subsequently be a positive boost to its financial performance from FY15 onwards.

Upon completion of the acquisition exercise, Chin Well will have a direct 60% stake in CW Vietnam, and a 40% indirect stake through its wholly-owned subsidiary Asia Angel.

As at 10.45 a.m, Chin Well was up 1.35% or 2 sen to RM1.50, with 15,500 shares changing hands, giving it a market capitalisation of RM403.35million.
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