D-Day for SMTrack: To buy on news or to sell on news

FRIDAY’S (Jan 14) late rebound seems to augur well for radio frequency identification (RFID) solution specialist SMTrack Bhd which is poised to lead a consortium of six Bursa Malaysia-listed companies – five of which are penny stocks – in the inking of a heads of agreement with little known 5G Infra Tech Solutions Sdn Bhd this morning (Jan 17).

According to sources, SMTrack would lead the six-member consortium via 5G Infra Tech to provide funding for the capital intensive 5G-related joint venture which will ultimately improve the consortium’s revenue stream and bottom line.

5G Infra Tech is mainly involved in the construction and engineering of telecommunication infrastructure including 5G roll-out in Malaysia.

“They will jointly collaborate to fulfill the Government’s aspiration in driving the development and rollout of 5G infrastructure network,” the source pointed out. “5G Infra Tech will either be holding a substantial stake in the telecommunication strategic target company or provide initial and subsequent funding in rolling out of 5G network.”

Apart from SMTrack, the other five consortium members are Country Heights Holdings Bhd, Jiankun International Bhd, Sersol Bhd, Techna-X Bhd and MQ Technology Bhd. Interestingly, AHB Holdings Bhd which was earlier touted to be the seventh consortium member has pulled out from the project.

Except for SMTrack whose share price movement seems to hinge on excitement surrounding the said project, such hype does not seem to influence the stock price of other consortium members.

For the record, SMTrack was only 16 sen on Dec 29 when Country Heights’ founder and executive chairman Tan Sri Lee Kim Yew emerged as its substantial shareholder.

Aside from the heads of agreement, SMTrack has been reportedly eyed by a government-linked company (GLC) owned by the Ministry of Finance Inc (MOF Inc) which has expressed interest “to excel as the majority stockholder with controlling interest over operations”.

In a related development, non-independent and non-executive director Datuk Seri Tan Choon Hwa has been reinstated as SMTrack’s substantial shareholder after he bought 5 million shares in the company on Jan 13 from the open market. This raises his shareholding in SMTrack to 35.5 million shares or 5.5% of total issued shares.

Sersol managing director Datuk Wira Justin Lim Hwa Tat who is also SMTrack’s executive director is expected to follow Tan’s footstep early next week, according to a person close to the deal.

For the record, Tan, Lim and Lee had ceased to be substantial shareholders of SMTrack on Jan 13 following a dilution of their shareholdings after an enlargement of the company’s share capital arising from the conversion of redeemable convertible notes.

At the close of Friday’s (Jan 14) trading, SMTrack was unchanged at 29 sen with 169.24 million shares traded, thus valuing the company at RM185 mil. – Jan 17, 2022

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