A misunderstood stock: Fintec Global clears the air about its very existence

ACE Market-listed Fintec Global Bhd has reiterated its denial that the company is in the business of shuffling assets except that it is sticking to its fundamental purpose as an investment holding company which core business is to identifying and invest in ‘profitable’ companies.

As part of its investment strategies, Fintec holds strategic stakes in several public listed companies with synergistic value that can be unlocked through inventiveness, collaboration and cross-selling opportunities, according to its managing director Tan Tan Sik Eek.

“As such, Fintec can be funding technology-based companies which are currently expanding in their current or international markets – or have the capability of it,” Tan told FocusM. “They could be poised to record exponential growth.”

Tan Sik Eek

Tan was commenting on yesterday’s (Aug 6) sudden spike of one of Fintec’s ‘incubatees’, VSolar Group Bhd, which topped the active stock list with a trading volume to almost 17 times its 200-day average.

In a Bursa Malaysia filing on the same day, Fintec said its wholly owned subsidiary Asiabio Capital Sdn Bhd and the company had on June 21 ceased to be substantial shareholders of VSolar in view of the disposal of 82.05 million shares which represent 35.36% of Asiabio’s total shareholdings in VSolar in the open market.

Fintec’s other ‘incubatees’ include Focus Dynamics Group Bhd, Saudee Group Bhd, Seacera Group Bhd, Komarkcorp Bhd and AT Systematization Bhd.

Similarly, both Asiabio and Fintec had also ceased to be a substantial shareholders of Komarkcorp Bhd on June 22 due to the disposal of 33 million shares (or 91% of Asiabio’s total shareholdings in Komark) in the open market.

Moreover, Fintec said both Asiabio and the company has also on June 23 ceased to be substantial shareholders of Saudee Group Bhd due to Saudee’s enlarged share capital which comprises 712.73 million shares subsequent to its rights issue exercise.

In fact, as of yesterday, both Asiabio and FIntec do not longer hold any equity stake in VSolar, Komarkcorp and Saudee.

Bigger risk appetite

Referring to the latest development, Tan noted that Fintec functions like a private equity (PE) fund in sniffing out opportunistic prospects across sectors with its investment decision (size of stake/horizon) evaluated by an investment committee.

“As minority shareholders, it is not our policy to hold the reins. After all, the companies’ management teams are well equipped to drive the business,” he pointed out. “However, timing means everything, and we are able to invest and divest as our internal key performance indicators (KPIs) are met.”

Considering that the trading of marketable securities is part of the company’s ordinary course of business, Tan said it is incorrect to suggest that funds or assets of the company are passed around.

“Very often enough, however, the true value of these companies are still hidden and may have yet to set a track record which makes it an unconventional choice for traditionally risk-averse investors – or even frowned upon,” justified Tan. “This is where Fintec comes in given we have a higher propensity for risk.”

Towards this end, Fintec has an investment team which is actively monitoring its strategic stakes in quoted and unquoted stocks under the group. The company’s investment credo includes being sector-inclusive and focusing on synergistic value.

The group’s current investment portfolio touches distinct industries, namely application technology, food and beverage (F&B), and precision engineering.

A case in point for the synergistic effect is Fintec’s ongoing glove manufacturing factory in Perak under its wholly owned Fintec Glove Sdn Bhd which has invested RM114 mil raised through its private placement to build and equip a 14-line double-former glove dipping factory to produce 3.3 billion pieces per annum.

With the anticipated production beginning in early 2022, the venture should contribute positively to the financial performance in the coming year.

“Our glove-making venture reinforces our opportunistic streak, in that we foresee a sustainable gap that we are able to fulfill,” envisages Tan. “This is complementary to our investment holding, and are confident of our journey forward.”

At the close of today’s mid-day trading, Fintec was unchanged at 2.5 sen with 1.44 million shares traded, thus valuing the company at RM102 mil. – Aug 6, 2021

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