Smooth sailing for EATECH 5259 pn17 E.A.TECHNIQUE (M) BERHAD after massive run-up?

 Smooth sailing for  EATECH 5259 pn17 E.A.TECHNIQUE (M) BERHAD after massive run-up?



Marine vessels operator. EA Technique (M) Bhd have had a rough couple of years to the extent that it had to regularised its financial situation.


Judging from its share price movements, one would assume that the company is on a firm path of recovery.


Particularly on June 13, EA Tech rose 32.3% to close at 20 sen.


More impressively, the counter had jumped 412.5% in the past year.


It would not be long before it surpasses its 52-week high of 38 sen.

 

One of the reasons for the bullish views on the company was its success in returning to the black as evident in its Q1FY23 numbers.


It registered a net profit of RM7.5 million versus a net loss of RM4.6% a year earlier having recorded an increase in its revenue to RM34.3 million versus RM30.7 million.


The company explained that the higher revenue was mainly due to start of time charter contract for the two new tankers in February 2023 and higher utilisation rate of vessels.


It recorded a profit before tax of RM7.5 million in Q1FY23 compared to a loss before tax of RM4.6 million a year agomainly due higher revenue, lower laid up cost of vessels disposed and insurance claim.


Investors are starting to accumulate this counter on possibility that EA Technique could see the emergence of a substantial shareholder.


EA Tech said in February that it is in discussions with a party that could subscribe to the group's new securities, which would result in the party acquiring a controlling stake in the group.


There has been speculation in the market that businessman Tan Sri Rashid Manaf, who is one of the founders of Eco World Development Group Bhd, could take up a substantial stake in EA Tech.


It was rumoured that Rashid might be acquiring shares from Sindora Bhd, a unit of Johor Corp (JCorp).


Through Sindora, JCorp holds a 50.1% stake in EATech. JCorp is also an indirect shareholder of EATech through the 2.43% stake held by Kulim (M) Bhd.


EA Tech slipped into PN17 status in February last year, as its shareholders’ equity of RM5.96 million as at Dec 31, 2021 was less than 50% of its share capital of RM179.76 million.


The success of EA Tech’'s Regularisation Plan is likely to have a positive impact on the company's share price.


As it is, the company's improved financial position and enhanced investment appeal should attract new investors and drive up the value of EA Tech share price.


As such, investors should keep a close eye on EA Tech as a good investment opportunity but keep a closer watch on the share price.
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