Previously, there are several toxic comments on this company - AGESON BERHAD as it was closely related to a certain prominent businessman. He successfully turned over ARBB from a money losing timber company, to a highly profitable ERP & IoT company. Moving forward, he will also be doing the same to our hidden gem today - AGESON BERHAD.
Dated 6th October 2020, AGESON BERHAD had issued a formal announcement on Bursa Malaysia to include Sand Mining, Trading and Export of Sand, and related business activities, despite the title "proposed diversification", I would like to call it "value enhancement".
To recap, AGESON BERHAD was previously involved in construction as well as property development. Well, we could say that they are dealing with sand on a daily basis!
Now back to the company's supporting "documents", unlike other B/S MoU, MoA, AGESON BERHAD had actually secured multiple contracts from oversea conglomorates, and the project value ranges from RM 110.6 Million to RM 27.4 Billion, below is an extract from the 12 pages long proposal:
In order to pursue the Sand Business, the Ageson Group had secured letters of intent and award to supply sand to overseas customers in bulk through Ageson Enterprise Sdn Bhd (formerly known as Esa Pile Sdn Bhd) (“Ageson Enterprise”), a wholly-owned subsidiary of Ageson which were announced at the relevant dates and summarised below:
(i) a letter of intent from Boyijun Resources (HK) Limited on 22 April 2020 to purchase natural sand in bulk, with an indicative contract value of approximately USD26.6 million (equivalent to approximately RM110.6 million) for a period of up to December 2021 with an option for extension;
(ii) an award from Guangzhou Kaishengda Industrial Co. Ltd on 4 May 2020 for the purchase of river sand and river mouth sand with a contract value of approximately RMB44.8 billion (equivalent to approximately RM27.4 billion) for a period of 15 years; and
(iii) a letter of intent from Techpack Solutions Co. Ltd on 27 July 2020 for the supply of silica sand, with an indicative contract value of up to approximately USD79.5 million (equivalent to approximately RM330.7 million) for a period of 5 years.
Some are skeptical on whether the company is able to run the sand business, and my short answer is - yes. They can. AGESON's endeavour in creating a joint venture agreement with Bintang Dayang Sdn. Bhd. and Menteri Besar Kedah' MBI Kedah will ultimately benefit all parties, as well as fuel the growth of AGESON BERHAD.
To conclude, AGESON will be enhancing their value by formally incorporating sand business into their ecosystem. They will be supply river sand for the use of construction, and silica sand for manufacturing of glass, bunkers, cast for metal production, ceramic products and so forth.
So moving forward, will we see a surge in the profitibility of the company? YES. But will investors benefit from it? Very likely no as I noticed only a selected few understands the uniqueness of this company. Again, you can choose to ignore this company, but don't come back and spread negativity when the share price doubles.