[ad_1]
“As you know, [our manufacturing business comprises] existing plastics and gloves, [which] we are also exporting so this is a fairly global market so we are exploring the possibility of listing in Hong Kong. “- Mah Sing CEO Datuk Steven Ng.
KUALA LUMPUR (December 16): Mah Sing Group Bhd is considering listing its manufacturing division, which includes its new rubber gloves business, in Hong Kong.
In a briefing today, Mah Sing CEO Datuk Steven Ng said the group is exploring the listing of its manufacturing division over the next five years.
“As you know, [our manufacturing business comprises] existing plastics and gloves, [which] We are also exporting, so this is a fairly global market, so we are exploring Hong Kong listing, ”Ng said.
Ng said the group’s manufacturing division is currently 100% owned by Mah Sing and as such would be under separate management under the tentative new listed entity.
The group’s manufacturing division also aims to produce other medical devices, which will be parked below the entity if it ends up going public.
When asked when the profits from this new rubber glove business will go live, Ng said that Mah Sing forecasts that the profits will begin in its financial year ending December 31, 2021 (FY21).
As such, the group anticipates that more than 25% of its net profit in fiscal year 21 will come from the rubber gloves business, which is why it is also holding an extraordinary general meeting (EGM) to obtain shareholder approval. for the measure.
“This is based on the assumption that was derived as part of the feasibility study as part of this company by the plastics division,” he said.
As such, Mah Sing forecasts that 75% of its fiscal year 21 profit will come from its current plastics business and primary ownership, with 25% coming from its new rubber glove business.
Earlier during the briefing, Ng noted that spot prices for rubber gloves have risen in recent months, which should also help with the glove business.
It ignored concerns about oversupply as demand for rubber gloves will continue to outpace supply.
In its current state, 95% of Mah Sing’s net profit is derived from its real estate business, with the remainder coming from its manufacturing division, which is still focused on plastics.
Mah Sing Chief Executive Officer Datuk Ho Hon Sang told the briefing that the group’s new glove manufacturing plant in Kapar, Klang, is on track to meet its planned production date of April 2021.
He explained that under Phase 1 of the plan, the group will have 12 new production lines with a maximum capacity of 3.68 billion pieces.
“The first six production lines will be on track to be operational as planned in 2Q21 (second quarter 2021), followed by another six lines expected to be ready by 3Q21,” he said.
Phase 2 of the plan will come when demand exceeds supply for Phase 1. Phase 2 involves the addition of 12 lines, increasing capacity by another 3.68 billion pieces.
Mah Sing announced that it had signed more than 60 letters of intent with potential clients. Then Ng explains that he is in the process of conducting due diligence for customers who have expressed interest, and will make contractual decisions when opening the manufacturing plant.
Average selling prices under these contracts would be determined by market forces, Ng added.
Mah Sing’s founder and managing director, Tan Sri Leong Hoy Kum, stressed that the group will continue to focus on ownership.
“The real estate market is recovering. In line with the best economic prospects in 2021, the medium and long term [is also] positive. I anticipate that the real estate market will slowly recover from the middle of next year, even now it is gradually improving, ”Leong said.
The group’s EGM on its diversification proposal will be held next Monday (December 21).
At the close of the market, Mah Sing was up three sen or 3.33% to 93 sen, valuing the group at RM2.26 billion.
[ad_2]