KUALA LUMPUR (Aug 17): Polyethylene-based building materials manufacturer Weida (M) Bhd plans to acquire a leasehold land measuring 40,140 sq m (0.004 ha) in Kuching, Sarawak — which it is currently leasing for its manufacturing operations — for RM6 million cash.

Weida told Bursa Malaysia in a filing today that its wholly-owned subsidiary Weida Integrated Industries Sdn Bhd (WII) has entered into a sales and purchase agreement (SPA) with Premium Fortune Sdn Bhd (PFSB) today (Aug 17) for the proposed acquisition.

According to the filing, PFSB acquired the land with RM935,000 on Aug 16, 2000. Since then WII has been renting the premises from PFSB for its manufacturing operations. The land is adjacent to WII's factory.

WII is principally engaged in manufacturing and sale of high density polyethylene products and waste tyre recycling.

Weida said the acquisition provides an opportunity for WII to own the land and continue using it for its manufacturing operations as compared to a periodic renewal of tenancy and the cost of relocating.

In addition to the fact that the land is adjacent to WII’s factory, the acquisition is expected to provide WII better control in terms of planning for future development and expansion.

Barring any unforeseen circumstances, Weida targets the deal to be completed within three months from the date of the SPA.

Shares in Weida (fundamental: 1.7; valuation: 2.4) inched down two sen or 1.36% to close at RM1.45 today, after 298,900 shares changed hands.

It has a market capitalisation of RM186.53 million.

(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.)