THE most obvious indication of how things are going at Liqua Health Corp Bhd is the almost deafening buzz at its marketing and distribution office. Liqua deputy executive chairman Fei Chong Ming and managing director Goh Bak Ming greet visitors with broad smiles these days, as Bizweek finds out when arriving at the office for an interview.
The reason for their sunny disposition is quite understandable. Liqua share prices have gone up by more than 175% to RM1.93 last Thursday since the beginning of last month. It is hard to imagine that the shares were trading at 60 to 70 sen as recently as June this year.
So what has been causing the share price to move up so strongly? See Keng Leong, the executive director in charge of administration and finance, offers a theory: “We have been carrying out a share buyback exercise recently and have been buying at prices ranging from 77.5 sen to RM1.08.
“The company has so far bought back 8.6 million shares, although the mandate allows us to buy up to 27 million shares in total.”
Some analysts, however, are not quite convinced with this explanation, suggesting that the company should have been buying back at lower prices. See counters that the company's has adopted a strategic approach to the buyback exercise and that it is “not in it to make a quick buck”.
That may be so but others have certainly made a quick buck with Liqua shares. These include those who bought the shares as recently as last month, when the price spiked to its present level.
See thinks it is possible that a lot of the buying was by the company's own product distributors. “We currently have about 19,000 distributors marketing our products, some of whom were entitled to pink forms way back when the company was to be listed.”
Following the restructuring of Parit Perak Holdings Bhd, Liqua was listed on Bursa Malaysia's main board last November in place of the former.
The question on many punters' lips will have to be: “Is the share price going to go higher?”
Naturally, Fei says that very much depends on the company's earnings prospects. “We have some pleasant surprises in store, in the form of exciting product launches in the middle of this month. We are confident that these products will be well-received by the distributors as well as the Malaysian public,” he adds.
Liqua has made its name in the direct marketing of health supplements, and is the first company to supply spirulina in liquid form in the country. Apart from spirulina-based health supplements, the company also sells vitamin and other dietary supplements.
Says Goh, “We are in the process of transforming the company into one which caters for the total well-being. This means that we are not just marketing health supplements. We will market products that will help in bringing about total well-being in people.”
This will start with the introduction of the Mini SLT (which is short for semiconductor laser treatment).
“Many people suffer from high cholesterol and diabetes,” says Fei. “Although the Mini SLT does not cure these diseases, it is nevertheless useful in helping to prevent high lipids and blood viscosity, which are the normal causes of high cholesterol and diabetes.”
Goh adds that the company will be setting up a diagnostic therapeutic centre, called the Quantum Healing Centre, to track the progress of Mini SLT users.
“We want our customers to see the effectiveness of the machine, and know that it is working. Once we capture even a small group of satisfied users, the product will virtually sell by itself. This was what we experienced when we first started out with the spirulina products,” he says.
Liqua will be introducing new products on a consistent basis, to keep the momentum of the transformation going. Fei is confident that the company will eventually be able to provide the full range of products and services to promote total well-being among its customers.
He says the feedback he has received so far from the distributors is positive and their confidence level is probably on an all-time high. “The challenge for the company, however, is to maintain the momentum.”
Prospective investors in Liqua will be looking for momentum of a different sort. They will, of course, be looking for upward momentum in the share price. This one, though, will be far more difficult to predict.
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