KUALA LUMPUR (Feb 26): Automotive electronic parts manufacturer MCE Holdings Bhd is disposing of a piece of freehold land in Setia Alam, Selangor for RM43.69 million cash.

MCE’s unit Vantage Realm Sdn Bhd entered into a conditional sale and purchase agreement with Mega First Corp Bhd’s indirect wholly owned unit Grant Ascent Sdn Bhd for the disposal, which has an estimated net pro forma gain of RM5.85 million.

The land, measuring approximately 13,263.38 sq m, was purchased by MCE in 2014 from Bandar Setia Alam Sdn Bhd.

The vacant land was specifically designated for the development of a medical centre and other ancillary buildings for medical related services.

However, MCE has decided not to proceed with the development of the land, which was purchased by the group with the intention to diversify its core business into the provision of healthcare services.

MCE intends to utilise the proceeds for working capital purposes.

"The group will continue to focus on its existing core business in the automotive sectors as per its business strategies at this juncture," it said in a filing with Bursa Malaysia on Monday.

Barring any unforeseen circumstances, the proposed disposal is expected to be completed in the fourth quarter of 2024.

MCE's net profit in the first quarter ended Oct 31, 2023 (1QFY2024) jumped 39.4% to RM4.87 million from RM3.49 million a year ago, underpinned by heightened demand for the group’s products.

Quarterly revenue rose 8.48% to RM41.27 million from RM38.56 million, primarily driven by higher sales in the automotive parts segment.

Shares of MCE were up two sen or 1.15% to close at RM1.76 on Monday, with a market capitalisation of RM217.46 million.