KUALA LUMPUR: Steel cookware maker Ni Hsin Resources Bhd (fundamental: 1.45; valuation: 0.6) is putting its oil and gas (O&G) venture on hold, amid slumping crude oil prices.

“We have yet to see any cheap assets in the market despite the plunging oil prices over the past few months,” managing director Chen Shien Yee told reporters after the group’s extraordinary general meeting yesterday.

“We think now is not lucrative for us to venture into the new business,” he said, adding that the group is ready to seize such an opportunity should it arise.

Chen also said Ni Hsin is still in talks with Ideal Jacobs (M) Corp Bhd as an O&G partner, but declined to elaborate.

“There is nothing concrete yet and I can’t give you any further information,” he said.

Last October, The Edge weekly reported that Ni Hsin was diversifying into the O&G sector and talking to potential joint-venture partners, with Ideal Jacobs potentially emerging as one of them.

The report quoted Ni Hsin executive director Datin Ida Suzaini Abdullah as saying that “credible” people with O&G know-how would be appointed to the board soon.

On its solar energy venture with Helious Photovoltaic Sdn Bhd, Chen said the deal is still in the preliminary stage and the group has yet to formulate the entire concept of the deal.

On the possibility of Helios emerging as a controlling stakeholder in Ni Hsin, he declined to comment, saying that there are a few possibilities but no conclusion yet. “We have a mutual understanding that they are interested in our group and we like their business,” said Chen.

“It is still too early to say whether Helios will be a significant shareholder, majority shareholder or [will] take a controlling stake in the group for now. It will depend on [the] negotiations,” he said.

On whether the listing status of Ni Hsin would be retained after the deal, he said much will depend on the outcome of the negotiations. On the rationale of the Helios deal, he said it was a proposed corporate exercise to inject better assets into Ni Hsin.

On Dec 4 last year, Ni Hsin had inked a memorandum of understanding with Helios, for it to tap into the solar energy business, which would be satisfied via the issuance of new shares and cash.

Meanwhile, the group expects to turn profitable in the current financial year ending Dec 31, 2015 (FY15), on improved orders from Japan. For the nine months ended Sept 30, 2014 (9MFY14), Ni Shin posted a net loss of RM551,000 compared with a net profit of RM1.53 million a year ago. Revenue fell 26% to RM30.14 million from RM40.73 million in 9MFY13.Chen said the group is expecting sales to grow by at least 10% in FY15, driven by rising orders from Japan, which currently accounts for 60% to 70% of the group’s total sales.

This article first appeared in The Edge Financial Daily, on January 23, 2015.