KUALA LUMPUR (March 30): Ann Joo Resources Bhd (KL:ANNJOO) rose on Monday in its most active trade in 20 months after the company received an acquisition offer for its upstream steel unit.
The proposed disposal would allow Ann Joo to unlock capital from its upstream operations and redeploy it into downstream activities, TA Securities analyst Ng Hong Tong told The Edge. Ann Joo has been under pressure from volatile steel prices weighing on its revenue, he noted.
Divesting the upstream segment could provide Ann Joo with financial flexibility and a clearer operational focus, potentially supporting a recovery in its performance, he said.
Ann Joo climbed as much as seven sen or 13% to 63 sen on Monday. The stock was trading at 58.5 sen at 11am as more than three million shares changed hands, its most active since August 2024. At its last price, Ann Joo was valued at RM421 million.
Shares of Ann Joo, however, have lost more than 44% since 2024 as the company grappled with a massive capacity glut as Chinese rivals stepped up productions while investors conscious about climate change shun the sector due to its high carbon intensity.
TA Securities, which has Ann Joo on a ‘sell’ rating, is one of only two research houses covering the counter. CIMB Securities, meanwhile, has a ‘hold’ recommendation.
On March 27, Southern Steel Bhd (KL:SSTEEL) announced that it is planning to acquire Ann Joo Steel Bhd (AJSB) in a cash transaction for non-current assets at a value of RM1.005 billion, plus current assets minus total liabilities, as well as any agreed transaction-related expenses to be borne by Southern Steel.
The deal covers AJSB and its wholly owned unit, Ann Joo Integrated Steel Sdn Bhd, but excludes its inactive land and property entities, AJSB Land Sdn Bhd and AJSB Properties Sdn Bhd.