M’sian Company To Subscribe RM1.87mil Shares In Chinese F&B Enterprise, Boosting E-Commerce Via Digital Free Trade Zone

NetX Holdings Berhad announced its subscription of shares in Flavours of Malaysia (FoM) on Thursday, May 25.

NetX’s subscription of FoM’s shares represent 51% of the issued and paid-up share capital, for a cash consideration sum of RMB 3 million (RM1.87 million).

FoM is a wholly-owned foreign enterprise company incorporated under the laws of China and has its business operations in Shenzhen, China and intends to expand by establishing fulfilment centres in HangZhou together with NetX.

As FoM offers Malaysian specialty Food & Beverage products in China, these fulfilment centres will conduct research and development on Chinese national acceptance of Malaysian products and to use the research findings to acclimatise the product to suit the local taste buds.

Together with NetX, the partnership also intends to develop a Halal-certified e-commerce market place for goods and services between Chinese and Malaysian consumers and will use NetX’s integrated Mobile Electronic Payment Exchange for the payment services of this eCommerce market place.

“According to a report online, Consumers in China spent $798 billion on food and beverage in 2014 and this is projected to grow by a Cumulative Annual Growth Rate (CAGR) of 11 per cent to reach $1.5 trillion by 2020.

“Of this aggregate, China’s estimated 26 million Muslims contributed around 0.1 percent, or $10 billion, estimates the State of the Global Islamic Economy 2015/16 report.

“To disregard this huge market group is foolhardy.

“NetX is always and will continue to be on the lookout for populous, profitable market penetration and our ultimate goal is to provide and ensure a seamless, e-commerce and e-payment experience,” said Steve Tan, Executive Director of NetX Holdings Berhad.

The decision to open the new fulfilment centres in HangZhou is based on Malaysia’s recent e-commerce roadmap for the Digital Free Trade Zone (DFTZ) and the establishment of regional e-fulfillment centres in Malaysia.

The DFTZ was launched by Prime Minister Datuk Seri Najib Razak and Alibaba founder Jack Ma on March 22, 2017 to provide physical and virtual zones to facilitate SMEs to capitalise on the convergence of exponential growth of the internet economy and cross-border e-commerce activities.

“DFTZ is a testament to Malaysia’s unwavering commitment to propel the growth of SMEs through e-commerce. It also marks a new phase of collaboration between Malaysian and Chinese businesses through the participation of Mr. Ma and Alibaba Group. I strongly believe that together, we can achieve a more prosperous economic landscape that benefits the industry and people,” Najib had commented.

The partnership between NetX and FoM could also be seen as a prelude to China’s One Belt, One Road (OBOR) initiative, which is poised to contribute to the local economic development.

Active Runner in Focus: DRB-HICOM BERHAD (1619.KL)

Shares of DRB-HICOM BERHAD (1619.KL) are moving on volatility today 2.38% or $0.04 from the open. The BM listed company saw a recent bid of $1.72 and 70695100 shares have traded hands in the session.

Investors might have been ready to throw in the towel as the rally stalled recently. However, the panic subsided and growth-hungry investors came searching for their favorite stocks in the wreckage. Keeping things in perspective, the economy seems good, and so does earnings growth. Investors may be wondering where the money will be flowing in the second half of the year. Many people may assume healthcare and tech would be the easy targets, primarily because that’s where the earnings growth is. Industrials and staples are no slouches for growth either, but they may be well fully-valued for their growth. Traders will most likely be honing their strategies that they created, trying to beat the market over the next couple of months. 

Digging deeping into the DRB-HICOM BERHAD (1619.KL) ‘s technical indicators, we note that the Williams Percent Range or 14 day Williams %R currently sits at -28.57. The Williams %R oscillates in a range from 0 to -100. A reading between 0 and -20 would point to an overbought situation. A reading from -80 to -100 would signal an oversold situation. The Williams %R was developed by Larry Williams. This is a momentum indicator that is the inverse of the Fast Stochastic Oscillator.

DRB-HICOM BERHAD (1619.KL) currently has a 14-day Commodity Channel Index (CCI) of 78.66. Active investors may choose to use this technical indicator as a stock evaluation tool. Used as a coincident indicator, the CCI reading above +100 would reflect strong price action which may signal an uptrend. On the flip side, a reading below -100 may signal a downtrend reflecting weak price action. Using the CCI as a leading indicator, technical analysts may use a +100 reading as an overbought signal and a -100 reading as an oversold indicator, suggesting a trend reversal.

Currently, the 14-day ADX for DRB-HICOM BERHAD (1619.KL) is sitting at 37.26. Generally speaking, an ADX value from 0-25 would indicate an absent or weak trend. A value of 25-50 would support a strong trend. A value of 50-75 would identify a very strong trend, and a value of 75-100 would lead to an extremely strong trend. ADX is used to gauge trend strength but not trend direction. Traders often add the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI) to identify the direction of a trend.

The RSI, or Relative Strength Index, is a widely used technical momentum indicator that compares price movement over time. The RSI was created by J. Welles Wilder who was striving to measure whether or not a stock was overbought or oversold. The RSI may be useful for spotting abnormal price activity and volatility. The RSI oscillates on a scale from 0 to 100. The normal reading of a stock will fall in the range of 30 to 70. A reading over 70 would indicate that the stock is overbought, and possibly overvalued. A reading under 30 may indicate that the stock is oversold, and possibly undervalued. After a recent check, the 14-day RSI for DRB-HICOM BERHAD is currently at 63.68, the 7-day stands at 62.14, and the 3-day is sitting at 60.68.

HLT Global suffers net loss in first quarter post-listing

HLT Global Bhd, which was listed on the ACE Market of Bursa Malaysia in January this year, suffered a net loss of RM206,000 for the first quarter ended March 31, 2017 (Q1 FY17).

 

This is the second consecutive quarter of net loss for the group, which reported a net loss of RM1.74 million in the fourth quarter ended Dec 31, 2016 (Q4 FY16). Prior to listing, the group reported a net profit of RM1.65 million in the third quarter ended Sept 30, 2016.

In a filing with Bursa Malaysia last friday, the group said the Q1 FY17 net loss was due to lower revenue and the listing expenses incurred. Revenue for the quarter stood at RM9.56 million, 38.9% lower than RM15.64 million in Q4 FY16.

"The decrease in revenue was mainly attributable to decline in revenue from sale of new lines. The revenue from sale of new lines was mainly contributed by five customers, made up of a combination of three local orders and two foreign orders," it said.

The group said it recorded lower revenue from sale of new lines as most of the orders are near completion. 

However, it said that it achieved higher gross profit margin of 12.89% during the quarter compared with 10.12% in the preceding quarter. It also secured a new foreign order from Vietnam which is expected to contribute positively to its revenue.

"The above, coupled with the incurrence of listing expenses of RM295,000 during the current financial quarter, has resulted in the group recording a pre-tax loss of RM197,000 for the current financial quarter," it said.

Singapore eDevelopment Ltd (SGX:40V) Cancer and Alzheimer’s Platform

Singapore eDevelopment Ltd (“SeD”), through its subsidiary Global BioLife Inc. (“Global BioLife”), has initiated advanced research of a new universal therapeutic drug platform, known as Linebacker, to combat a range of diseases including Alzheimer’s, diabetes and cancer. The research will be led by two-time Nobel Prize nominee, Mr Daryl Thompson.

Singapore Exchange-listed SeD said Mr Daryl Thompson will leverage on his expertise in organic and carbohydrate chemistry and the use of pandemic technology in combating the Ebola virus in the research and development of this universal therapeutic drug platform, known as Linebacker.

Unlike the traditional approach to cure individual diseases with specific drugs, the Linebacker platform seeks to offer a breakthrough option for multiple diseases to be cured. It can also potentially combat drug-resistant viruses and antibiotic-resistant bacteria.

Mr Daryl Thompson will lead the research to be conducted by Global BioLife in his capacity as Director of Scientific Initiatives. Global BioLife is an 80%-held subsidiary of SeD’s wholly-owned subsidiary, Global BioMedical Inc. The remaining stake of Global BioLife is held in equal proportions by Mr Daryl Thompson’s GRDG Sciences LLC and Australia Securities Exchange-listed Holista CollTech Limited.

Mr Daryl Thompson was nominated for a Nobel Prize in 2015 and 2016 for his research in cutting-edge organic and carbohydrate chemistry as well his research in pandemics technology to fight pandemics such as Ebola. He has used his expertise to initiate research regarding universal therapeutics to cure the world’s deadliest diseases. Mr Scott Truesdell, Research Coordinator and Special Projects Leader at Global BioLife, will execute the research on the Linebacker platform.