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Chin Hin acquires 24.68pc stake in asset-rich Ajiya, emerges as largest shareholder

CHGB Group managing director Chiau Haw Choon said the company would be able to tap into Ajiya's order book and network of supply chain and clientele, which the company built over its three decades of existence.

KUALA LUMPUR: Property and building materials conglomerate Chin Hin Group Bhd (CHGB) will emerge as the single largest shareholder of building materials manufacturer Ajiya Bhd, making the latter the fourth listed company under its stable.

CHGB will acquire a 24.68 per cent equity interest in Ajiya for RM104.4 million, and this acquisition would help the company expand its product range from building materials into high value-added safety glass products, metal roofing, metal door and window frames.

CHGB Group managing director Chiau Haw Choon said the company would be able to tap into Ajiya's order book and network of supply chain and clientele, which the company built over its three decades of existence.

"The acquisition is in line with the company's objective of acquiring strategic stakes in companies with potential for future growth.

"Synergistic benefits are expected to arise from the acquisition as both CHGB and Ajiya operate in and service the same industry, namely the construction and property development industry.

"In addition, Ajiya also has overseas presence in countries such as Thailand and CHGB may be able to leverage on the overseas network for future expansion abroad," he said in a statement today.

This is also CHGB's biggest acquisition since its listing on the main market in 2016.

CHGB signed a conditional share sale agreement today with Ajiya's major shareholder and Avia Kapital Sdn Bhd (AKSB) to acquire 72,000,000 ordinary shares or a 24.68 per cent stake in the company.

Datuk Chan Wah Kiang will be re-designated as the founder and group chief executive officer of Ajiya from the current managing director post after completing the share sale.

CHGB is confident that Chan will be an important asset to spearhead Ajiya forward, given his proven leadership and decades-long experience in the metal roofing and safety glass businesses.

Ajiya has a sturdy balance sheet, backed by total assets of RM485.5 million against total liabilities of RM67.3 million.

The company is also a net cash company and sits on a cash pile of RM146.7 million as of end-November 2021.

The company completed its financial year ended 30 November 2021 on a strong note, with a net profit of RM18.9 million against a revenue of RM268.5 million.

In comparison, CHGB recorded a net profit of RM31.3 million and revenue of RM1.2 billion for the 12 months ended 31 December 2021.

Upon completion of the acquisition, CHGB will be able to equity-account the financial results of Ajiya, which is expected to contribute positively to the company's earnings.

CHGB will fund the RM104.4 million acquisition via internally generated funds and bank borrowings.

Meanwhile, Chan is optimistic about this deal with CHGB as Ajiya would benefit significantly from the latter's exposure in the property development business.

"In addition, given CHGB's involvement in building materials segment, both parties would be able to work on streamlining costs and optimising order delivery flow jointly.

"The property development and construction sectors in Malaysia have shown meaningful signs of recovery, with promising growth prospects ahead.

"Coupled with the low-interest rate level for residential and commercial unit purchases, Ajiya is likely to benefit from the higher demand for building materials, namely metal and safety glass products.

"On the other hand, the Malaysian government's renewed interest in affordable houses is also expected to drive more job flow for Ajiya Green Integrated Building System (AGiBS), which is our very-own Industrialised Building System (IBS) solution," Chan said.

https://www.nst.com.my/business/2022/03/781157/chin-hin-acquires-2468pc-stake-asset-rich-ajiya-emerges-largest-shareholder

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