KUALA LUMPUR (June 26): GIIB Holdings Bhd (KL:GIIB), a rubber compound distributor and tyre retreader, is in talks to invest in the exclusive Malaysian distributor of traditional Chinese medicine and food products marketed under the Wonlucky brand.
In a bourse filing on Friday, the company said its wholly owned subsidiary GIIB Project Management & Capital Sdn Bhd has signed a memorandum of understanding (MOU) with Tricrest Foodie Trading Sdn Bhd to explore a proposed subscription of new shares in the company. Tricrest holds the exclusive distribution rights for Wonlucky products in Malaysia.
A conditional share subscription agreement will be negotiated between the parties, with GIIB expecting to execute the definitive agreement within 90 days.
The proposed investment follows GIIB's disclosure on May 4 that it was evaluating a healthcare-related business, after Bursa Securities issued an unusual market activity (UMA) query over the sharp appreciation in the company's share price and trading volumes.
According to GIIB, Tricrest plans to leverage its exclusive distribution rights to market halal-certified Wonlucky products in Malaysia, while also exploring expansion opportunities across Southeast Asia, the Middle East and Africa.
"The board believes that the proposed investment, if completed, would provide GIIB with an opportunity to participate in the potential long-term profitability of the products," the company said.
Wonlucky products are manufactured by Guangzhou Wanglaoji Pharmaceutical Co Ltd, a subsidiary of the state-owned Guangzhou Pharmaceutical Group, which is known for developing traditional Chinese medicine and food products.
The MOU marks GIIB's latest attempt to diversify into the healthcare sector. The company ventured into rubber glove manufacturing during the pandemic-driven boom in 2021, but the expansion unravelled after it became embroiled in a dispute with its main contractor, Glomaxes Latex Glove Manufacturer Sdn Bhd. GIIB subsequently exited the venture and refocused on its core rubber compound manufacturing business.
The latest proposed investment remains subject to approvals from GIIB's board and, where required, its shareholders and Bursa.
GIIB shares have climbed sharply since late April, prompting two UMA queries from Bursa over the past two months. The stock closed up two sen or 4.35% at 48 sen on Friday, valuing the company at RM339.5 million. The shares have surged about 500% so far this year.