Friday 29 Mar 2024
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KUALA LUMPUR (March 3): Cookware manufacturer Ni Hsin Resources Bhd is diversifying into solar energy.

Ni Hsin (fundamental: 1.45; valuation: 0.6) chairman Md Nazir Md Kassim said the company had signed a Heads of Agreement (HOA) for the acquisition of the entire equity stake in solar energy entity Helios Photovoltaic Sdn Bhd.

"This proposed corporate exercise will further strengthen Ni Hsin's fundamental while providing a major income stream to the company in the near figure.

"Such merger and acquisition shall add value to the group," Md Nazir said after the HOA signing here today.
 
Despite the diversification, Ni Hsin will continue to grow its existing cookware business. Md Nazir said Ni Hsin was aiming to tap into the China, Indonesia and other South East Asian markets for growth to help achieve its 2015 sales growth target.

Ni Hsin's planned diverfication into solar energy comes at a time when the company's financials have weakened.

The firm's net profit fell to RM57,000 in financial year ended December 31, 2014 from RM2.28 million a year earlier. Revenue was lower at RM40.73 million versus RM55.15 million.

At 10:57am, Ni Hsin shares fell 0.5 sen or 1.4% to 36.5 sen for a market capitalisation of RM84.32 million.

The stock had gained 10% this year, outperforming the FBM KLCI's 3% rise.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

 

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