KUALA LUMPUR (Dec 14): The share price of FACB Industries Incorporated Bhd (FACBI) continued to march by as much as 21% this morning (Friday) after shooting past its year's high yesterday on news that the company was selling its steel business that could raise its net asset to RM2.70 per share.
Its associated companies Karambunai Corporation Bhd (KBunai) and Petaling Tin Bhd also danced along today.
All three stocks were within the top-10 active list, with KBunai grabbing 3rd spot, Petaling Tin solid at 6th and FACBI at 8th slot.
The three companies are controlled by Tan Sri Dr Chen Lip Keong. Ranked as one of the 40 top richest men in Malaysia, Chen is involved property development and manufacturing in Malaysia, hotel and gaming business in Cambodia, as well as oil and gas industry in the region.
At 12pm noon break, FACBI surged 16 sen or 19.5% to 98 sen with 10.35 million shares done, after receding from a high of 99 sen. Yesterday, it rose by 40% to end at 82 sen.
KBunai rose one sen or 8.7% to 12.5 sen per share on trades of 17.04 million, while Petaling Tin soared 6.5 sen or 26.5% to 31 sen on volume of 12.27 million shares.
"The sentiment in KBunai and Petaling Tin is lifted by FACBI. FACBI is seen as healthy now, with its cash rising to RM1.90 per share after disposing its loss-making business," said a bank-lined retail dealer.
"Speculators are riding on the healthy news of FACBI. Retail investors have to be careful of the possibility of dumping by syndicates when prices hit their targets," said a senior remisier, also a leader of the remisiers' association.
On Wednesday, FACBI announced that it was selling its loss-making steel business to concentrate on its bedding operation.
The disposal will bring to the group a combined gain of RM68 million, or 80 sen per share, the company said. Net asset will rise to RM2.70 per share, including cash of RM1.90 per share.
With the latest development, FACBI share is now seen as undervalued and dealers are seeing an upward potential.
Senior dealer KC Goh from SJ Securities said: "It is possible that this stock might challenge the high of 2007 at RM1.39…To make money in this stock, one probably need to hold. Day trade or short term trading is always very risky."
FACBI was formerly known as Dreamland Bhd. It was originally started and owned by Tan Sri Lim Kim Hong in the 1970s. Lim, now controlling property group I-Bhd, sold the bedding firm in the mid-1990s for over RM350 million.
For the financial year ended June 30, 2012, FACBI recorded a loss before tax of RM2.97 million, and total revenue of RM244.57 million. But with the sale, the balance sheet will be changed for the better tremendously.
"Chen, with his move on FACBI, is instilling confidence in his other counters. Investors may be buying the related stocks due to more positive sentiment," said Goh.
Improvement in fundamentals is also seen in KBunai.
KBunai, an investment company and services provider, posted a net profit of RM46.62 million in the second quarter to end-September 2012.This was a turnaround from a loss of RM16.44 million for the same period in 2011. Its net asset per share stood at 30 sen as at end-September.
But its Dec 6 announcement of a corporate exercise involving the undertaking of capital reconstruction and a rights issue was not well received. As a result, its share was hit.
For Petaling Tin, a property company with little activity, its third quarter to September saw a loss of 132,000 on RM2.65 million. There was no comparative figure for the corresponding period in previous year due to a change in the financial year.
As at end-September 2012, the net asset of Petaling Tin stood at RM1.09 per share.