Fundamentals and financial position determining factor for investment

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INVESTMENTS by the state in a listed stock are based on a thorough analysis and assessments of the company’s fundamentals, finances, and potential prospects and growth.

Deputy Premier and Second Minister for Finance and New Economy Datuk Amar Douglas Uggah Embas said this in his ministerial winding-up speech today when responding to issues raised by See Chee How (PSB-Batu Lintang) on the state’s investment in Serba Dinamik.

“When the state participated in Serba Dinamik’s Initial Public Offering (IPO) back in 2017 and subsequent investment prior to COVID-19 pandemic, the financial position of the company was strong with a revenue of RM2.72 billion in 2017 and RM4.52 billion in 2019 with profits after tax (PAT) of RM304.79 million and RM497.98 million in 2017 and 2019 respectively.

“In fact, to date, the state had received a total of RM22.552 million dividend pay-outs from the company with a yearly dividend yield ranging from 4.6 per cent to 6.9 per cent,” he said.

The state has also received free share split and bonus issues amounting to 66 million shares.

“Undeniably, all investments carry some degree of risks. Of course, no guarantee can be given about future performance and any decision to invest shall not be construed as offering such a guarantee.

“In the case of Serba Dinamik, no one could have anticipated for things to derail unexpectedly. The company is currently going through a series of interim setbacks.

“Nonetheless, the latest update indicates the company is looking into a turnaround and restructuring plan in which existing investors are looking forward to,” he said.

Uggah stressed that the investment made by the state government was closely monitored.

“We wish to not reach to a position whereby too often, investment decisions are made based upon isolated and short-term considerations (in the heat of the moment) without regard to the portfolio as a whole.

“The state’s investments are intended for long-term value appreciation and not for short-term trading,” he said.

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