KUCHING: Sarawak Consolidated Industries Bhd (SCIB) share price has been on an “extraordinary” rally following the change of key ownership barely three months ago.
From a penny stock languishing below 50 sen per share a year ago, SCIB shot to intra-day high of RM2.50 yesterday against 2019’s close of RM1.90 or up by more than 30 percent in a short span of two weeks.
With total issued shares of 85.882 million units, SCIB’s market capitalisation has ballooned to over RM200 million.
SCIB, whose core businesses are in the manufacture of precast concrete products and industrialised building system (IBS) components, was among the top gainers on Bursa Malaysia last year, with a hefty gain of RM1.42.
The company saw major ownership change after Sarawakian tycoon Datuk Dr Mohd Abdul Karim Abdullah took control with a stake of 50.49 percent. The Serba Dinanimk Holdings Bhd’s boss offered RM1.10 per share in the mandatory general offer (MGO) for SCIB shares which he did not already own in September.
Mohd Abdul Karim first emerged as a substantial shareholder in SCIB when he acquired 19.35 million shares or 22.53 percent in May 2019.
He has since replaced Tan Sri Hamid Bugo, a former substantial shareholder,as company chairman. Hamid and his son Rewi have exited the company after selling their entire shareholdings to Mohd Abdul Karim.
Newly appointed SCIB managing director Rosland Othman,who was one of the persons acting in concert (PAC) with Mohd Abdul Karim in the recent MGO exercise, has continued to scoop up SCIB shares in the open market in the past two weeks.
Rosland, also Serba Dinamik senior vice-president, acquired 20,000 shares for RM39,400 or RM1.97 per share on January 10, increasing his equity interest in SCIB to more than 3.8 million shares or 4.43 percent. On December 31, he purchased another 502,000 shares for a total RM961,412.
When asked, a local analyst said he was baffled with the sharp rise in SCIB share price within a short period.
“The price rally could be due to the company’s securing some domestic and overseas contracts recently, other than the change in key ownership. There is no other justification for the sharp run-up to the share price,” he said.
On October 25, SCIB announced that the company had accepted letters of award for three engineering, procurement, construction and commissioning (EPCC) contracts in Indonesia, Oatar and Oman while its wholly-owned subsidiary SCIB Properties Sdn Bhd has accepted letter of award for two EPCC contracts in Malaysia.
The total contract value for the overseas job is US$27.99 million while the contract value for the EPCC job in Malaysia is RM58.2 million.
The analyst suspects strong speculative play in SCIB and cautions investors to act based on the company’s fundamentals.
In third quarter to December 31, 2019, SCIB posted group’s net profit of RM752,000 on revenue of RM21.8 million. The company’s net assets per share is 59 sen.
In financial year 2018, SCIB incurred group’s pre-tax loss of RM9.93 million on turnover of about RM76 million.