GENETEC Technology Bhd could well be the most expensive ACE Market stock for a long, long while.
Even amid a pandemic-ravaged economy, the designer and manufacturer of smart automation systems, customised factory automated equipment and integrated systems has seen its share price breaking new grounds by regularly topping the gainers’ list to edge closer to the RM30 mark.
After being linked to battery for electric vehicle (EV) hype – namely battery assembly – Genetec has seen its share price spiraled multiple folds from RM3.70 on May 31 to an intraday high of RM28.28 yesterday (Aug 12) – a whopping 664% jump.
In its latest Bursa Malaysia filing, Genetec is seeking shareholders’ mandates to approve a series of recurrent related party transaction (RRPT) valued at an estimated aggregate of RM45.1 mil during its 23rd annual general meeting (AGM) on Sept 15.
In its rationale for seeking shareholders’ mandate, Genetec said the RRPT are recurring transactions of a revenue or trading nature which are likely to occur with some degree of frequency and arise at any time.
“The RRPT entered by the group are all in the ordinary course of business,” justified Genetec.
“As these transactions may be constrained by the time-sensitive nature and confidentiality of such transactions, it may be impractical to seek shareholders’ approval on a case-by-case basis before entering into such RRPT.”
As such, the company has to resort to seeking shareholders’ mandate pursuant to Rule 10.09 of Chapter 10 of the ACE Market Listing Requirements (AMLR) and Guidance Note 8 to allow the group to enter into such RRPT made on an arm’s length basis and on normal commercial terms which are not detrimental to the company’s shareholders.
“By obtaining approval of the proposed shareholders’ mandates on an annual basis, the necessity to convene separate general meetings from time to time to seek shareholders’ approval as and when such RRPT occur would not arise,” Genetec further pointed out.
“This will avoid expenses associated with the convening of general meetings on an ad hoc basis and prevent administrative inconvenience.”
For its 1Q FY3/2022 ended June 30, 2021, Genetec returned to the black with a net profit of RM8.21 mil (1Q FY3/2021: net loss of RM2.09 mil) from a revenue of RM40.28 mil (1Q FY3/2021: RM12.43 mil).
For its entire FY3/2021, Genetec’s net loss widened to -RM4.39 mil (FY3/2020: -RM900,000) on the back of a higher revenue of RM98.08 mil (FY3/2020: RM80.33 mil).
Interestingly, the company’s major shareholder Chen Khai Voon has been mopping up Genetec shares all along the way with his last transaction occurring on July 27 for 22,900 shares that brings his direct and indirect interest in the company to 12.49% and 7.07% respectively.
At 11.13am, Genetec was up 50 sen or 1.89% to RM27 with 91,200 shares traded, thus valuing the company at RM1.38 bil. – Aug 13, 2021
