Can SRIDGE 0129 SILVER RIDGE HOLDINGS BHD turn around its fortunes amidst the negative sentiments surrounding the company?

 Can  SRIDGE 0129 SILVER RIDGE HOLDINGS BHD turn around its fortunes amidst the negative sentiments surrounding the company?



It is intriguing that loss-making Silver Ridge Holdings Bhd has been climbing the share price chart.


In over a year, the counter has surged some 160% to close at 39 sen  on May 5 after touching a 52-week high of 40 sen.


Just on May 5 alone, Silver Ridge gained some 8.3%.


Climbing from a low of 7.5 sen, it seems puzzling why there is keen interest in the telecommunications solutions provider.


Not only is the company loss making, Silver Ridge has been drawing headlines with the four of its directors was reprimanded by Bursa Malaysia on April 25 for breaching the listing requirements.


The four directors are former group managing director and Langkawi Member of Parliament Datuk Mohd Suhaimi Abdullah, who resigned on Jan 4, 2023.


The other 3 are deputy managing director Syakur Mohd Suhaimi, executive director and CEO Satila Mohd Suhaimi, and executive director Wong Chee Keong, who resigned on July 5, 2022.


The company was publicly reprimanded for failing to make an immediate announcement when it received a letter of award dated May 4, 2021 for a RM20.64 million contract.


It was only after five months did Silver Ridge announced the contract while its 4 executive directors at the material time breached the rules.


Prior to the reprimand, the company bought the remaining 49% stake in SR Total Digital Sdn Bhd from the existing shareholders namely Silver Ridge Group MD Syauqat Mohd Suhaimi and Total Group Bhd for RM122,500.


Is this some kind of bailout for its group MD, who recently took the helm from his father Datuk Mohd Suhaimi Abdullah.


Mohd Suhaimi, who is Langkawi Member of Parliament has resigned as group MD of Silver Ridge effective Jan 4.


Syauqat also holds the position of CEO after his sister Satila Mohd Suhaimi stepped down from the post.


Based on the above, it appears to be quite a number of ‘red flags’ at Silver Ridge.


Perhaps, investors sensed some kind of M&A happening for Silver Ridge and there has been some active dealings in Silver Ridge shares by its directors.


Is this enough to entice investors to continue buying the counter?


Well, probably not if they are looking at investing in companies with strong fundamentals.


SIlver Ridge’s net loss widened to RM2.2 million in the second quarter ended Dec 31, 2022 from RM359,000 a year earlier.


The higher loss was attributed to higher in contract service costs, legal costs and finance cost in the current quarter.


Revenue fell 44% to RM2.4 million in 2QFY23 from RM4.2 million a year ago  due to the delay in certifying particular projects and lower new substantial contract being secured.


Currently, the group is focusing on the maintenance of network and infrastructure which will enhance the recurring and existing income business model.


It has identified and evaluated the necessary licenses from various government agencies.


In addition, Silver RIdge has ventured into tower development and management services which further increase its cash inflow.


Whatever the plan is, there is no guarantee the company will fare better in the near future. For now, investors will be taking relatively huge risk if they are looking at putting their funds into this counter.
#SRIDGE

https://xifu.my/OpinionsComment.aspx?BID=B01071028P0AA0B0