ELECTRONIC-based Industronics Bhd has found itself in a good position to tap into the Hong Kong (HK) financial markets which is poised to benefit from the potential delisting action of US Stock Exchange-listed China stocks for failure to meet audit requirements.
This follows the company’s inking of a non-binding letter of intent (LOI) with HK-based Bluemount Financial Group Ltd to purchase a 10% stake in the latter for RM12.5 mil.
Bluemount is a renowned stockbroking, asset management and credit firm valued at HK$250 mil (RM135 mil).
Well-funded with abundant capital, the company is familiar with how financial markets operate, hence possessing rigorous internal control systems which have led to a profit of HK$10 mil (RM5.4 mil) and HK$20 mil (RM10.8 mil) in 2020 and 2021 respectively despite the COVID-19 pandemic disruption.
“Bluemont has a proven track record in Hong Kong in the financial services business. It is an exciting journey ahead for us as this acquisition would help us tap into the lucrative financial services business in Hong Kong,” commented Industronics’ executive director Datuk Chu Boon Tiong.
Bluemount’s wholly-owned securities brokerage arm, Bluemount Securities Ltd is an exchange participant of the Stock Exchange of Hong Kong Ltd and is licensed by the Securities and Futures Commission of Hong Kong (SFC) to carry out Type 1 (dealing in securities) and Type 4 (advising on securities) regulated activities.
Meanwhile, its wholly-owned asset management subsidiary Bluemount Asset Management Ltd (BAML) is licensed by SFC to carry out Type 9 (asset management) regulated activity. BAML provides portfolio and investment management services to professional investors.
The company’s credit services is undertaken by Bluemount Credit Ltd, a wholly-owned services arm of the group.
“Bluemount has a team of professionals and experts who have vast experience in the financial services segment. Whether a business is looking for a listing on the HK Stock Exchange or if there is a need for credit services, Bluemount has a viable solution for them,” added Chu.
“On top of that, there is a strong team that can help with the management of funds in Hong Kong. This is evident from the impressive 1,900% growth in one of the funds under its management (Cyber Investment Fund Sp) in Hong Kong.”
Recently, the US Securities and Exchange Commission (SEC) has adopted amendments to finalise the rules to implement the Holding Foreign Companies Accountable Act.
The law was passed in 2020 after Chinese regulators repeatedly denied requests from the US Public Company Accounting Oversight Board to inspect the audits of Chinese firms that list and trade in the US.
There are currently about 250 Chinese companies that were listed in the US, hence the push towards delisting for Chinese companies means investors who relied on US-listed China stocks would have to look at an alternative such as the Hong Kong Stock Exchange.
At 9.19am, Industronics was down 0.5 sen or 4% to 12 sen with 2.19 million shares traded, thus valuing the share at RM47 mil. – Dec 16, 2021
