KUALA LUMPUR (Oct 30): Ni Hsin Group Bhd (KL:NIHSIN) said the resale of five million treasury shares for RM2.38 million on Monday (Oct 26) may have contributed to the sharp fall in its share price and heavy trading volume, in response to an unusual market activity (UMA) query from Bursa Malaysia on Friday.
The cookware manufacturer, however, said it could not conclusively determine whether the transaction had contributed to the recent trading activity.
"While the board is unable to conclusively determine whether the said disposal contributed to the recent trading activity, it may have had an impact on the trading volume and/or share price of the company's securities," Ni Hsin said in a bourse filing on Friday.
According to a separate filing on Monday, Ni Hsin resold five million treasury shares at prices ranging from 47.5 sen to 48 sen apiece, raising RM2.38 million.
Following the transaction, the company held 44.35 million treasury shares.
Ni Hsin also said it was unaware of any rumours or reports concerning its business that could explain the unusual trading activity, following enquiries with its directors, major shareholders and other relevant parties.
The group pointed to two previously announced corporate exercises, namely its proposed bonus issue of up to 312.65 million free warrants announced on Tuesday (Oct 27) and its proposed diversification into the electric vehicle (EV) business announced on Sept 8.
Ni Hsin also maintained that it was in compliance with Bursa Malaysia's Main Market Listing Requirements, particularly those concerning immediate disclosure obligations.
The response came after Bursa Malaysia issued a UMA query earlier on Friday, following a sharp sell-off in Ni Hsin's shares accompanied by heavy trading volume.
The stock plunged as much as 59.5% to an intraday low of 15 sen before paring losses to close at 26 sen, down 11 sen or 29.7%, with more than 66 million shares changing hands.
At its closing price, Ni Hsin has a market capitalisation of approximately RM151 million.
The sharp decline came just three days after the company's shares reached an all-time high of 51 sen on Tuesday.
Before the sell-off, Ni Hsin's shares had surged sixfold in a rally that began on Aug 20, supported by heavy trading volume, despite the company reporting a quarterly loss during the period.
The rally continued after Ni Hsin announced plans on Sept 8 to diversify into the EV business.
More recently, the group proposed a one-for-two bonus issue of up to 312.65 million free warrants, with proceeds from their eventual exercise earmarked for working capital and capital expenditure.
Under the proposal, 95% of the proceeds will be used to purchase inventories, including electric bikes, batteries and charging cabinets, as well as to fund marketing, after-sales services and administrative expenses.
The remaining proceeds will be used to expand assembly lines, production and storage facilities.