KUALA LUMPUR (Aug 2): Shares of Asdion Bhd (KL:ASDION) declined to the lowest in nearly 10 months on Friday, after the loss-making company was put on Guidance Note 3 (GN3) status.

Asdion fell as much as 12.5% to 3.5 sen as at 10.40am — its lowest since Oct 12, 2023 — after some 700,000 shares changed hands on Bursa Malaysia. The company has a market capitalisation of just RM6.09 million.

The Bursa Malaysia Technology Index, which tracks 48 stocks in the sector, slipped 2.34% to 73.01 points, while the country’s benchmark index, FBM KLCI, was 0.86% lower to 1,610.25 points.

No institutional analysts cover Asdion.

The counter has plunged 65% so far in 2024, after years of volatile swings. The stock had hit a nearly six-year high of RM1.59 back in February 2021, and then received an unusual market activity (UMA) query by Bursa Malaysia.

In March 2021, AT Systematization Bhd (KL:AT) made a conditional voluntary takeover offer to Asdion Group Bhd at 50 sen per share, but later in August 2021 called off its plan as Asdion secured approval from its shareholders for the proposed debt settlement and placement exercises.

As a GN3 company, Asdion is required to submit a regularisation plan to Bursa Malaysia and obtain approval to implement the plan within 12 months from Aug 1. Failure to comply with these obligations may result in the stock facing suspension and delisting from the ACE Market.

The company said it is in the process of formulating a regularisation plan to address its financial condition, and will make the necessary announcements regarding the matter.

Asdion, which is involved in logistics businesses, commodity trading, and property development, has been loss-making for over a decade since the financial year ended Dec 31, 2009 (FY2009).

The GN3 status was triggered on Thursday (Aug 1), after its external auditors, CAS Malaysia PLT, flagged material uncertainty that would affect the company’s ability to continue as a going concern.

According to the auditors’ report, Asdion’s current liabilities exceeded its current assets by RM5.56 million and RM6.38 million at the group and company levels, respectively, as at end-March 2024.

Asdion also incurred net losses of RM7.79 million and RM40.79 million at the group and company levels, respectively.

Since its listing in January 2005, Asdion has completed about four private placements, raising approximately RM16.41 million in total proceeds, mainly used for working capital and new investment.

The company was initially involved in software development and IT, and began diversifying into the logistics business in 2015 as well as property development in 2016. Currently, Asdion is only left with the logistics division, which recorded a net loss of RM4.81 million, according to its latest financial report.

Asdion’s major shareholders include Phillip Securities Pte Ltd with a 23.50% stake, and Sumon Construction Pte Ltd, which bought a 23.49% stake on April 8.

Another substantial shareholder is Cheah Kwong Lee, who has an 8.02% stake. Cheah is a former executive director of IT firm Wintoni Group Bhd, which was delisted in March 2021.

Read also:
Asdion classified as GN3 company, given 12 months to submit regularisation plan
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AT Systemization calls off planned takeover of Asdion