KUALA LUMPUR (Mar 17): Metallurgical coke producer Sino Hua-An International Bhd, controlled by Negri Sembilan royal family, has submitted an application to Bursa Securities to seek a waiver from having its shares suspended as a result of the temporary closure of its production plant in China.

“The board of directors wishes to announce that Sino Hua-An has submitted an application to Bursa to seek a waiver from complying with Paragraph 8.03A(2) and (3) of the Main Market Listing Requirements of Bursa Malaysia today,” the group said in a filing with the exchange this evening.

According to Rule 8.03A of Bursa Malaysia’s Listing Requirements, a listed issuer is required to maintain an adequate level of operations in order for its shares to continue trading in the exchange.

The rule further stipulates that a listed issuer risks having its shares either suspended or delisted if it has suspended or ceased all or part of its major business.

To recap, Sino Hua-An had yesterday announced that the temporary closure of its subsidiary Linyi Yehua Coking Co Ltd in China – which contributed almost 100% to its  financial results – is expected to have a material impact on its financial health for the year ending Dec 31, 2015 (FY15).

However, Sino Hua-An did not provide an estimate on quantum of the expected losses.

The temporary closure came as a result of tough stance by China’s Ministry of Environmental Protection (MOEP) to address persistently heavy pollution in the city.

Sino Hua-An (fundamental: 1.85; valuation: 1.2) said all steel mills and coke producers, regardless of their standards of compliance in Linyi City, have been instructed to temporarily stop production, until the MOEP concludes its assessment.

Sino Hua-An is controlled by its executive chairman Tunku Naquiyuddin Tuanku Ja’afar, the son of the late Negri Sembilan ruler. According to its 2013 Annual Report, he owns a 28.21% stake in Sino Hua-An, held via Syarikat Pesaka Antah Sdn Bhd and other various vehicles.

Sino Hua-An’s second largest shareholder is its managing director Liu Guo Dong — a Chinese national who holds a 15.86% stake via UOB Kay Hian Nominees (Asing) Sdn Bhd.

The group produces and sells metallurgical coke and its by-products, such as coal gas, tar, ammonia sulfate, crude benzene, coal slime and middlings.

Currently, Sino Hua-An produces 1.8 million tonnes of metallurgical coke annually.

The stock closed 8.33% lower at 11 sen today, trimming its market capitalisation to RM123.45 million from RM134.68 million yesterday.

(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.)