GROWTH prospects for Transmile Group Bhd has brightened with the emergence of tycoon Robert Kuok as its single largest shareholder.
Investment analysts agree that the new shareholder will elevate Transmile's standing in the air cargo industry because the Kuok family is a leading player in the transportation and logistics business in Asia.
There were synergies between Transmile and the transportation business of the Kuok family which had strong connections in China and Hong Kong , analysts said.
According to a filing with the MSEB, Trinity Coral Sdn Bhd, a company owned by the Kuok family, had on March 25 acquired 45.2 million shares or 28.5% stake in Transmile at RM6.25 per share.
And separately the exchange was informed that Transmile CEO Gan Boon Aun and director Khiudin Mohd had sold 32.6 million and 22 million shares in the company respectively at the same price.
The announcement confirms a StarBiz report on March 26 that Kuok had bought a controlling stake in Transmile via an off-market transaction. Transmile is now the second public-listed transportation company in Malaysia under the stable of the Kuok family. The other is Malaysian Bulk Carriers Bhd.
The purchase came hot on the heels of an air services agreement between Malaysia and Hong Kong that removed restrictions on the number of flights that could be operated between the two destinations.
The open capacity agreement, inked in Hong Kong on March 12, appears to benefit the smaller players in the aviation industry. Analysts said the agreement would be a licence for Transmile to extend its reach to China and North American – two of the most lucrative markets in the world.
Analysts are upbeat on the prospects of Transmile following the latest developments; some have already revised upward their earnings forecast for the current financial year ending Dec 31 and the year after.
“While Transmile's earnings have grown on a compounded annual growth rate of 22.9% in the past three years, we expect growth to be even faster in the next few years,'' said K&N Kenanga in its research note. But some analysts find it too early to assess the financial impact resulting from the new shareholder and the latest air services agreement, although these are positive developments.
Transmile's share price has gained 41% or RM2.04 since the beginning of the year to RM7 – the highest level since November 1997. Some analysts caution that the stock may have run ahead of its fundamentals. Stock Watch On TRANMIL Stock Watch On TRANMIL-O