Chin Hin Group Property rises on plans to diversify into infrastructure

KUALA LUMPUR (Dec 13): Chin Hin Group Property Bhd (CHGP) rose as much as 1.5 sen or 1.71% to a high of 89 sen on Monday morning, after the group announced plans to acquire a 60% stake in construction firm Makna Setia Sdn Bhd for RM9 million cash to diversify into the infrastructure construction industry.

At 11.13am, the counter pared some gains at 88.5 sen, still up one sen or 1.14%. At 88.5 sen, the counter was valued at RM372.06 million.

Year-to-date, the counter has risen 70.19%.

Last Friday (Dec 10), CHGP said its subsidiary Kayangan Kemas Sdn Bhd (KKSB) had inked a conditional share sale agreement with Makna Setia’s shareholders Liew Jor Ho, Chai Yan Min and Yap Seng Hee for the acquisition.

Makna Setia is a Grade 7 contractor registered with the Construction Industry Development Board. The company is mainly involved in the construction of public infrastructure, which includes bridges, railway tracks and highways.

Currently, Makna Setia is undertaking approximately RM335.6 million worth of projects with expected completion period between January 2022 up and until July 2023.

For the financial year ended Dec 31, 2020, Makna Setia registered a revenue of RM55.7 million with a profit after tax of RM5.1 million.

CHGP executive director Chiau Haw Choon said in a statement the proposed acquisition will enable CHGP to diversify and tap into the infrastructure construction industry, which is complementary to CHGP’s existing property development business and KKSB’s construction business.

“The proposed acquisition will not only enable CHGP to have an indirect access to the ongoing and future projects of Makna Setia, but also expand to a wider scope within the construction industry which includes public infrastructure development such as bridges, railway tracks and highways,” he said.

He added that moving forward, the company will be able to strengthen its own in-house construction team and aim for infrastructure projects in the country, which shall expand its expertise beyond building houses.

“Premised on the above, and given the established business and positive historical financial performance of Makna Setia, the board expects that the proposed acquisition will benefit CHGP in the long run and contribute positively towards the future earnings of the company in totality.

"Our goal is to transform CHGP into a major property, construction and infrastructure player — therefore this corporate exercise fits into our strategy perfectly,” he said.

According to him, the proposed acquisition will also add onto the existing orderbook of KKSB that is worth RM1 billion.

Edited by Surin Murugiah

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