KUALA LUMPUR (Jan 16): Shares of Leform Bhd fell as much as 28.5 sen or 58.16% in the evening session on Tuesday, ending a three-month bull run that saw the steel products manufacturer more than double its value.
At 5pm, Leform, which was listed in November 2022 at 23 sen per share, recouped some losses to trade at 27 sen, having touched a low of 20.5 sen earlier. It is still down 22 sen or 44.9% from its Monday close of 49 sen.
Some 215.31 million shares were traded, near four times its two-month average volume of 57.2 million shares.
The sell-off from 49 sen per share to 20.5 sen per share saw as much as RM425 million in market capitalisation erased from the company. At 27 sen per share, the group has a market capitalisation of RM399.9 million.
This has prompted Bursa Malaysia to issue an Unusual Market Activity (UMA) query to the company.
The bourse operator asked Leform to announce if there were any corporate developments relating to its business and affairs that had not been previously disclosed which may account for the trading activity, or any rumour or report concerning its business and affairs, other possible explanations for the trading activity, and if it is in compliance with listing requirements on immediate disclosure obligations.
Since its listing on Nov 30, 2022, Leform’s performance has underwhelmed, with three of five reported quarters in the red.
In the nine months ended Sept 30, 2023 (9MFY2023), Leform booked a net loss of RM8.7 million, from a net profit of RM8.41 million in the same period last year, on the back of a RM11 million quarterly loss in 3QFY2023.
The group attributed the performance to lower revenue, deteriorating margins and higher expenses due to additional deliveries, higher electricity costs and higher finance costs.
Revenue, however, dropped just 8.73% to RM261.48 million, from RM286.52 million, on lower average selling prices, offset by higher volume sold.
Leform’s largest shareholder is its group MD Law Kok Thye, who owns a 22.99% direct stake and has a deemed interest of 51.03% in the company through Tianwen Holdings Sdn Bhd.