KUALA LUMPUR (Dec. 13): Chin Hin Group Property Bhd (CHGP) rose 1.5 Sen or 1.71% on Monday morning to a high of 89 Sen after the group announced a 60% stake in construction company Makna Setia to acquire Sdn Bhd for 9 million RM cash to diversify into the infrastructure construction industry.
At 11:13 the meter lost some gains at 88.5 sen, still up one sen, or 1.14%. At 88.5 Sen the counter was estimated at 372.06 million RM.
The counter has risen by 70.19% since the beginning of the year.
Last Friday (December 10), CHGP announced that its subsidiary Kayangan Kemas Sdn Bhd (KKSB) had signed a conditional share sale agreement with Makna Setia shareholders Liew Jor Ho, Chai Yan Min and Yap Seng Hee for the acquisition.
Makna Setia is a Grade 7 contractor registered with the Construction Industry Development Board. The company is mainly engaged in the construction of public infrastructure, which includes bridges, railroad tracks and highways.
Makna Setia is currently carrying out projects valued at approximately RM 335.6 million, which are expected to be completed between January 2022 and July 2023.
Chiau Haw Choon, executive director of CHGP, said in a statement that the proposed acquisition will allow CHGP to diversify and develop the infrastructure construction industry, which complements CHGP’s existing real estate development business and KKSB’s construction business.
“The proposed acquisition will not only give CHGP indirect access to Makna Setia’s current and future projects, but also expand it to a broader scope within the construction industry, including the development of public infrastructure such as bridges, railroad tracks and highways,” he said.
He added that in the future, the company will be able to reinforce its own in-house construction team and seek infrastructure projects in the country that will expand its expertise beyond home construction.
âBased on the above and given the established business and the positive historical financial results of Makna Setia, the Management Board expects that the planned takeover will benefit CHGP in the long term and make a positive contribution to the future results of the company as a whole.
“Our goal is to make CHGP a major real estate, construction and infrastructure company – so this corporate mission fits perfectly into our strategy,” he said.
According to him, the proposed acquisition will also expand KKSB’s existing order book worth RM 1 billion.