PETALING JAYA: Engtex Group Bhd has proposed to acquire a 51% stake in Leading Wonder Sdn Bhd (LWSB) to participate in the clean energy solution.
“The acquisition will enable Engtex to participate in the clean energy solution which will contribute to the green environment,” Engtex said in a filing with Bursa Malaysia.
Engtex is acquiring the stake from Beh Hock Seng and Leong Chee Seong, non-related parties, for RM62,292 cash.
Following the acquisition, LWSB will become a 51%-owned subsidiary of Engtex.
The balance of 49% is held by Northern Solar Sdn Bhd, a non-related company.
LWSB is currently dormant and its intended principal activity is the provision of solar energy solutions.
For its third quarter ended Sept 30, 2022, Engtex’s net profit dropped to RM5.42mil from RM17.59mil in the previous corresponding period.
Revenue, meanwhile, improved to RM351.24mil from RM238.93mil a year earlier.
In a statement on its third-quarter earnings, Engtex said its performance will rely on factors such as the recovery of domestic demand, the volatility in the international and domestic metal prices and the timely implementation of projects in the construction, utilities, infrastructure and property development sectors.
“Notwithstanding this, the wholesale and distribution segment will continue to focus on expanding its existing customer network and product range and sourcing for new products locally and abroad.
“The manufacturing segment will improve, automate, optimise and expand its operating capacity and continue to look for new business opportunities.”
Engtex said the property development segment will focus on selling its remaining unsold residential and commercial properties located at Kepong and Selayang.
The group also said it will explore property development opportunities or sale of its existing landbank.
“With the continued recovery in the tourism industry, the hospitality segment shall focus on increasing its revenue from the letting of rooms to the local and foreign tourists, and meetings, incentives, conferences and exhibitions activities to achieve higher gross operating profits.
“The performance of the group during the year remains challenging, as it is dependent on the growth in domestic demand and economic activities,” it said.
In a recent report, Kenanga Research said Engtex’s current order book stood at RM285mil.
It comprised of orders for ductile iron pipes worth RM29mil, largely consisting of a two-year renewable contract with Pengurusan Air Selangor and orders for mild steel and piling pipes worth RM265mil, which are largely from the phase one of Sungai Rasau Water Supply project.
The research house said ductile iron pipes will come from new water projects, as well as pipe replacement programmes to address the high non-revenue water problems particularly in Selangor, Sabah and Sarawak.