KUALA LUMPUR (Feb 14): CSH Alliance Bhd’s share price dipped 30% to 4.5 sen on Tuesday morning (Feb 14), from the last closing price of 6.5 sen, after the company announced the disposal of its electric vehicle (EV) distributor Alliance EV Sdn Bhd for RM20 million cash to glove maker Hong Seng Consolidated Bhd.
CSH Alliance opened at 5.5 sen a share on Tuesday, before dipping to 4.5 sen as at 9.11am. At the time of writing, its trading volume stood at 41.64 million shares.
Meanwhile, Hong Seng opened at 20 sen, unchanged from its last closing price, before jumping to 21.5 sen. Its trading volume stood at 86.34 million shares in the morning.
CSH Alliance announced on Monday the disposal of its EV distributor after owning 55.32 acres (22.39 hectares) of leasehold land in Tanjung Malim, Perak. It had intended to set up an EV battery manufacturing plant and a local commercial EV assembly plant there.
Alliance EV had also obtained a manufacturing licence from EV producer BYD Co Ltd to assemble commercial electric van T3 on the land in Tanjung Malim.
But CSH Alliance said the business would require “extensive resources” and “substantial working capital”, prompting it to realise the value of the investment via the sale of Alliance EV.
In a separate statement, Hong Seng said it will fund the acquisition via internally generated funds. It expects the plan to be completed in the second quarter of this year.
Following the oversupply in the rubber glove sector post pandemic, Hong Seng turned into the red in the latest reported quarter. However, it posted full-year net profit of RM97.19 million for the 12 months ended Sept 30, 2022, on a revenue of RM198.4 million.