Second guessing Bintai Kinden’s major shareholders’ sell-out

BINTAI Kinden Corp Bhd – one of the listed companies which boost eye-catching names alongside Eversendai Corp Bhd and Favelle Favco Bhd – has raised eyebrows for the wrong reason this time around.

The building and industrial service engineering specialist saw its second largest shareholder Nusankota Development Sdn Bhd exiting the company on Dec 16 after having disposed of its entire stake of 50.03 million shares or 14.4% interest in the open market.

Coincidentally, the company’s largest shareholder, Bintai Holdings (M) Sdn Bhd, also sold 28.5 million shares or an 8.14% stake equivalent in the company on the same day. The disposal reduces its shareholding in Bintai Kinden to 31.69 million shares or 9.05%.

Both transactions were made public via a Bursa Malaysia filing on Dec 18.

While the action of both shareholders is by all means legal, it has somewhat raised the question if they have lost faith in Bintai Kinden’s much publicised COVID-19 venture or they merely cash out to capitalise on the company’s attractive share price.

Recall that Bintai Kinden which has seen its share price spiked multiple times from a low of 4.5 sen on March 23 has entered into a distribution and licensing agreement with US-based Generex Biotechnology Corp and its subsidiary NuGenerex Immuno-Oncology Inc on Oct 26 to partake a COVID-19 vaccine venture in Malaysia.

After all, Generex is targeting to get the US Food and Drug Administration’s approval in the first or second quarter of 2021.

Bintai Kinden has to pay Generex US$2.63 mil (RM10.93 mil) for the pre-commercialisation stage and US$10 mil for the commercialisation stage in relation to the intellectual property, commercialisation, distribution, licensing and other rights granted.

Whatever the reasoning may be, Minority Shareholder Watch Group CEO Devanesan Evanson opined that the disposal of such huge chunks of shares may be perceived as a lack of confidence in the company especially since the licensing and distribution agreements have not come into operation.

“Then again, the two largest shareholders – by selling their shares – may be signalling to the market that the shares are overvalued,” he told FocusM. “But after all, they may have really needed the cash and wished to cash-out.”

While only the shareholders know the exact reasons behind their disposal, minority shareholders must nevertheless take heed of the share acquisition/disposal of major shareholders as such transactions may be telling something.

At 12.30pm, Bintai Kidnen was up 9.5 sen or 14.29% to 76 sen with 214.85 million shares traded, thus valuing the company at RM266 mil. – Dec 22, 2020

Subscribe and get top news delivered to your Inbox everyday for FREE