Hot Stock Tekala jumps on RTO, property venture

by **Cals** Sat 05 Dec 2015, 00:02

Hot Stock

[size=28]Tekala jumps on RTO, property venture

By Tan Siew Mung / theedgemarkets.com | December 4, 2015 : 11:33 AM MYT

KUALA LUMPUR (Dec 4): Timber processer Tekala Corp Bhd ([You must be registered and logged in to see this image.] Valuation: 0.90, Fundamental: 1.20) jumped as much as eight sen following a proposed RM513 million reverse takeover (RTO).

Tekala announced to Bursa Malaysia yesterday that WMG Holdings Sdn Bhd was undertaking the RTO, which would see WMG assume Tekala's listing. The RTO will result in Tekala's diversification into property development.

Today, Tekala shares rose to their highest at 38.5 sen before paring gains to 37.5 sen at 10.47am. Tekala's latest closing share price of 30.5 sen valued the company at RM42.7 million.

"The deal, which involves RM513 million, is more than 10 times the counter's market capitalisation. This explains why investors view the corporate exercises positively," a timber and property analyst told theedgemarkets.com over telephone.

Tekala is loss-making. The firm's net loss narrowed to RM3.82 million in the second quarter ended Sept 30, 2015 from a net loss of RM3.89 million a year earlier. Revenue fell to RM7.8 million from RM13.03 million.

First-half net loss widened to RM7.18 million from a net loss of RM5.82 million. Revenue was lower at RM15.01 million from RM28.4 million.

Compared to Tekala's current share price, its latest reported net assets per share is 51 sen.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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