KUALA LUMPUR (Aug 21): Minox International Group Bhd (KL:MINOX), which distributes industrial stainless-steel valves and fittings, is planning to diversify into property development by acquiring Johor-based residential developer Pembinaan Dragon Point Sdn Bhd (PDP) for RM15 million in a cash-and-share deal.
The ACE Market-listed group inked a conditional agreement on Friday to acquire PDP, incorporated in 1990, from its founder and managing director Koh Kun Chuan and executive director Jason Koh Jian Hui, Minox's bourse filing on Friday showed.
The purchase price will be satisfied by RM6.72 million cash, with the remainder RM8.28 million to be covered by the issuance of 36 million new Minox shares — representing 10% of Minox's issued share capital — at 23 sen each. The cash will come from internal funds or bank borrowings.
Minox currently derives all its revenue from the distribution of hygienic stainless steel valves, tubes and fittings to the food and beverage, pharmaceutical and semiconductor industries. The group, listed in October 2023, has been profitable every year since, though earnings growth flattened in the latest financial year. Net profit came in at RM4.1 million for its financial year ended Dec 31, 2023 (FY2023), RM5 million for FY2024 and RM5.1 million for FY2025.
It is anticipating the new business to contribute 25% or more to its earnings after the acquisition, which comes with an annual profit guarantee of at least RM2.5 million in profit after tax for FY2027, FY2028 and FY2029 — a total of RM7.5 million over the three years.
PDP made a net profit of RM985,700 in FY2023, RM823,802 in FY2024 and RM928,064 in FY2025, as revenue dropped from RM8.58 million to RM6.51 million, before rebounding to RM8.43 million.
PDP has so far completed three residential projects in Muar and Tangkak, with an aggregate gross development value (GDV) of about RM19 million. It has two ongoing developments in Tangkak, with a total GDV of RM14.8 million. Both were about 75% completed as at Aug 3, with full completion targeted in the third-quarter of this year.
It has five projects in the pipeline with an estimated aggregate GDV of RM55.2 million. These are joint-venture arrangements and are expected to commence progressively between the first quarter of 2027 and the second quarter of 2029.
The diversification requires approval from shareholders.
Minox shares closed half a sen or 2.8% lower at 18 sen on Friday, valuing the group at RM61.25 million. The stock is down 28% from its initial public offering price of 25 sen.