Autoair shares up on talk of major Middle East deal

  • Business
  • Wednesday, 15 Oct 2003


THE share price of Autoair Holdings Bhd shot up yesterday on speculation that the automotive air-cond maker will be signing a major deal with a Middle East client which could boost its future earnings.  

The second board counter was suspended at 11am after hitting limit-up at RM1.10. On resumption of trading in the afternoon, it rose further to close at RM1.36 for a 56-sen gain for the day on total volume of 2.4 million shares. 

“The presence of many Middle Eastern businessmen in Putrajaya appears to have stirred interest in the company,” said an institutional dealer with a local brokerage, pointing to the Organisation of Islamic Conference Summit currently being held in Putrajaya. 

She said Autoair, which has about 50% share of the local car air-cond market, could be following in the footsteps of other car component manufacturers such as Ingress Corp Bhd, which had signed similar agreement with a partner in the Middle East. 

Autoair had also indicated earlier that it planned to strengthen its presence in Middle East countries such as Iran, which had strong car manufacturing activities. 

Any overseas deal signed could help the company's earnings prospects. For the financial year ended June 30, Autoair posted a net profit of RM497,000, which represented an earnings per share of RM1.14. In addition, the company has a net cash position of RM744,000. 

Another analyst, however, dismissed market talk about a possible deal, saying the counter could be part of rotational play by certain investors taking advantage of the buoyant market sentiment. 

He added that any deal with a Middle East counterpart would not likely contribute significantly to Autoair's bottom line, which was mainly dependent on the local market. 

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