MQTECH (0070) MQ Technology Berhad Frankly Speaking: Jumping on the glove bandwagon
On July 15, MQ Technology Bhd announced a joint venture (JV) with Hong Kong-based industrial zinc distributor JD Resources International Ltd to acquire a company that manufactures gloves and also owns a rubber glove-making factory.
Details were scant, but MQ Tech said talks were at an advanced stage. The news is largely positive for investors, particularly as the ACE Market-listed rapid tooling manufacturer will be able to capitalise on a booming segment created by the Covid-19 pandemic.
MQ Tech was also recently reported to be a front runner, alongside Top Glove Corp Bhd, to acquire Kamunting-based glove maker Latexx Partners Bhd. The group said it will be in talks with Semperit Group — the major shareholder of Latexx Partners — on the possible acquisition, although the terms have yet to be finalised.
The moves, however, have raised concerns as glove making is uncharted waters for MQ Tech.
It is worth noting that it has been announcing deals with various companies involved in different types of businesses in recent months. However, there has been not much development although its share price has seen some movement.
MQ Tech had, in July last year, signed a memorandum of understanding with Kelantan Football Association. But it terminated the deal last month, blaming the pandemic for eroding gate collection at games.
MQ Tech has been loss-making for the past nine years and had accumulated losses of RM25.39 million as at Dec 31, 2019. Its cash balance stood at RM340,378, while borrowings totalled RM13,334.
Only time will tell whether its venture into glove making can revive the group.