MPI chips
KUALA LUMPUR: D & O Green Technologies Bhd has been approached by several parties to participate in a corporate exercise amid the consolidation taking place in the semiconductor industry currently.
The semiconductor components maker said it was open to opportunities to join in the industry's rationalisation, but added that discussions were still at a preliminary stage.
“There is no certainty at this stage of the discussions that will lead to signing of any definitive agreement,” D & O said in reply to Bursa Malaysia Securities’ query on whether there was an unannounced corporate development to account for the surge in D & O’s share price recently.
“In the event that there is any firm development, the company shall make an immediate announcement to the public,” D & O continued.
Since the start of this month, D & O shares have climbed 37.5% in value. On Thursday, the price gained 0.01 sen to 55 sen, with 17.71 million shares changing hands.
Asked whether there was any rumour or report that may explain the share trading activity, D & O said there had been a surge in interest by investors after the Feb 22 release of the results for its fourth quarter (Q4) ended Dec 31, 2016.
In the quarterly report, it announced higher sales and profits due to a change in its business focus. Its earnings grew 91% to RM3.93mil in the quarter under review from a year earlier.
“The company has shifted its focus from the highly competitive, volatile consumer electronic and general lighting segments (to the automotive segment) as elaborated in note B2,” D & O said in Thursday’s announcement.
“This change in business focus, coupled with the burgeoning global automotive industry as stated in note B3 of the fourth quarterly results announcement, could account for the trading activities of the company.”
That shift, along with the strengthening of the US dollar against the ringgit, helped to bolster the group’s gross profit margin from 19% in 2015 to 23% last year.
D & O said the increase in investors’ interest in its shares might also be due to an analyst report on the company by Public Investment Bank dated Monday, March 6.
