Takaso Resources Bhd is in the midst of discussions on several possible joint-venture projects and the possible acquisition of a company, all of which have not been finalised, it told Bursa Malaysia in a response to an unusual market activity (UMA) query yesterday.
Takaso was reponding to an UMA query made by Bursa, as its trading volume suddenly shot up to 61.58 million shares on April 7. Its share price had risen from the 45-sen level in late-March to 54 sen yesterday.
Takaso is currently involved in the manufacturing of rubber products and baby products, as well as trading in baby apparel, infant milk and toiletries, recycling, and the trading of general products, electrical and mechanical products.
Trading in Takaso shares has seen short bursts of volume over the last few months. On March 24, volume suddenly surged to 61.03 million shares. Back in January, its shares touched a 52-week high of 74 sen on Jan 26. This too was accompanied by a few days of heavy volume.
There have been two new developments in the company since December. First, there was the entrance of a new shareholder in the form of mid-sized developer OCR Land Holdings Sdn Bhd, which currently holds a 13.81% stake in Takaso.
On Dec 22 last year, OCR Land first emerged as a substantial shareholder in Takaso with a 6.31% stake. Billy Ong Kah Hoe, the managing director of the family-owned OCR group, was also appointed as a non-independent and non-executive director of Takaso in November.
That was the same time when Ong himself emerged as a major shareholder of Takaso. He now owns 9.02% of Takaso.
On April 2, Takaso told Bursa that it had redesignated Ong to executive director.
Collectively, OCR Land and Ong now control some 22% of the company.
The second development was on Jan 13 when Takaso announced that it had received a letter of award from OCR Land to construct a 21-storey commercial building for RM37.4mil.
Furthermore, the company has proposed to diversify Takaso’s business to include construction activities. There wasn’t any impact to the share price with this announcement, until Jan 20. From the 53.5-sen level, the shares soared to 71.5 sen on a sudden surge of volume in a matter of three days.
The rise was unsustainable, and almost immediately, the stock started to tank. By Feb 2, the stock was back to the 51.5-sen level.
In a circular to shareholders on March 17, Takaso said that based on the contract sum of RM37.4mil for the construction of the commercial building, it anticipates that the group’s venture into construction will contribute 25% of the company’s net profit.
It also said that the construction business would be one of the major contributors to the group, and Takaso would look to secure more construction projects in the future.
This diversification into property is deemed to be a related-party transaction, as OCR Land and Ong are both major shareholders of the company.
For the second quarter ended Jan 31, 2015, Takaso narrowed its losses to RM787,000 from RM1.13mil on the back of a 17% drop in revenue to RM17.86mil in the same quarter of the previous year.
For the six-month period, the company continued to record a net loss of RM1.2mil from a previous loss of RM2.1mil. Revenue was down 11.15% to RM18.52mil.