SCIB in talks for potential land buy, capacity expansion as shares hit limit down for second day

Friday 22 Nov 2024

KUALA LUMPUR (Jan 17): Sarawak Consolidated Industries Bhd (SCIB) is in talks with the Sarawak state government over a potential land acquisition, the company said in response to an unusual market activity (UMA) query issued on Wednesday, after its shares hit limit down for the second consecutive day.

“The company had on Jan 4, 2024 received the letter of offer from the Land and Survey Department of Sarawak to acquire some parcels of land measuring approximately 22 acres in size for the purpose of expanding the production capacity of the group.

“The management is in the midst of discussion and considering the acceptance of this proposal. The Board believes that it would be more appropriate to release announcement(s) to Bursa Securities once the decision is made,” it stated.

Shares of SCIB had plunged 35.93% or 30 sen to 53.5 sen as at Wednesday’s close, wiping out all gains of the past three months. It was the second most active stock on Bursa Malaysia, with 202.45 million shares traded.

The latest fall in its share price represents a significant loss of 65.5 sen or 55.04% from its 30-month high of RM1.19 only notched on Monday, resulting in a wipeout of RM419.36 million in market capitalisation. At 53.5 sen, SCIB is valued at RM342.53 million, compared with RM761.89 million based on Monday’s close of RM1.19.

In a press statement on Wednesday, SCIB's managing director Ku Chong Hong said the company does not have any influence over its share price movements and is not aware of any specific reasons for the recent trading activity. He has further emphasised that the company turned profitable in the latest financial quarter.

"[SCIB's recent achievements] include securing an RM97.7 million EPCC contract for the University Malaysia Kelantan project, signing a critical MOU for a RM250.0 million housing project in Bintulu with Kemena City Development Sdn Bhd and Smart Borneo Properties Sdn Bhd, and acquiring a RM16.8 million contract for Projek Pembinaan Pangkalan Pasukan Gerakan Udara PDRM Sarawak," the company added.

In the first quarter of FY2024, SCIB made a net profit of RM926,000 or 0.14 sen per share, from a net loss of RM871,000 or 0.15 sen per share a year ago.

The share price performance of SCIB remains erratic. Previously, the counter experienced a price rally from March 2020 up to January 2021, during which its share price hit a historical high of RM2.96. The stock had been on a declining trend since then, before witnessing a rebound rally which started in May 2023.

At that time, SCIB saw the departure of Serba Dinamik Holdings Bhd co-founder Datuk Mohd Karim Abdullah as a shareholder in the middle of last year. SCIB also announced a slew of boardroom changes, including the appointment of Abang Abdillah Izzarim Abang Abdul Rahman Zohari, the son of Sarawak Premier Tan Sri Abang Johari Tun Openg, as executive chairman.

Renewed interest in SCIB appeared to be further fuelled by Putrajaya’s announcement that it was allocating some RM5.8 billion in development funds to Sarawak under Budget 2024 for major infrastructure projects, including the Sabah Pan-Borneo Highway and Sarawak-Sabah Link Road.

However, Abdillah Izzarim stepped down as executive chairman just six months later on Dec 11, and was succeeded by Datuk Seri Zaini Jass.

No controlling or substantial shareholder has emerged following Abdul Karim’s exit in June last year, when he disposed of all his 139.67 million shares or a 21.81% stake due to forced selling.

The manufacturer of precast concrete and industrialised building system products currently operates three factories in Kuching, Sarawak — one factory in the Pending Industrial Estate and two factories in the Demak Laut industrial park.

Edited ByAdam Aziz

Text Size