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Singapore Investment


  PTRB 0260 PT RESOURCES HOLDINGS BERHAD faces short term challenges but poised to benefit from rising demand

It has been an impressive ride for frozen seafood products processor and trader PT Resources Holdings Bhd.

Over the past year, its share price has gone up 40.5% to 52 sen on June 26 but still shy from its 52-week high of 68 sen seen in February this year.

The counter rallied to the 52-week high before the company announced its proposed collaboration with Ocean Exchange (Fujian) Foreign Trade Services Co Ltd for the joint development of an International Supply Chain Intelligent Park in Kuantan.

According to reports, the project is estimated to be worth RMB1.56 bil (about RM1 bil).

The project is intended to drive the development of food and light industries supply-chain between Malaysia and Fuzhou with the aim of rapidly achieving currency internationalisation between the two countries.

The International Supply Chain Intelligent Park will have integrated cold chain facilities to facilitate cross-border supply of consumer food.

They plan to build a digital financial platform utilising the UnionPay network to streamline and facilitate effortless cross-border payments and settlements between the International Supply Chain Intelligent Park and Fuzhou Park.

The project also aims to boost the trade between the Malaysian seafood wholesale market and China through digital transformation, whilst collaborations with cold chain logistics companies will be initiated to facilitate an integrated logistics supply chain.

PT Resources sells its products domestically and exports to Saudi Arabia, China, the Philippines, and the United Arab Emirates (UAE).

The company procures wild-caught and farm-raised seafood supplies from local and international wholesalers, aquaculture farms and fishing enterprises.

It also sells frozen seafood and other products through its own outlets and its online marketplace, MO Signature.

The company owns and operates 7 MO Foodmart outlets and one MO Wholesale Centre outlet located in the East Coast region.

Such a preliminary tie-up with Ocean Exchange was exciting enough to spur PT Resources share price to touch its 52-week high.

Since then, the counter has been on a roller-coaster ride in terms of share price volatility and volume.

It appears that its period of hibernation and recuperation is over as the counter regained strength and on an upward trend.

On June 26 alone, the counter rose 10.6%, perhaps signalling the materialisation of the logistics park.

Financially, PT Resources has seen better results.

Revenue rose 32% to RM115.4 million for the third quarter ended 31 January 2023 (3Q FY2023) compared with RM87.4 million a year ago.

However, its net profit declined to RM2 million from RM4.7 million a year ago.

For the nine months just ended, its revenue increased 29.3% to RM356.1 million from RM275.4 million a year ago.

Net profit increased marginally to RM17.8 million from RM16.9 million a year ago.

The company is optimistic of growth but admits there are challenges arising from cost pressures that has affected its operations directly and indirectly while foreign currency volatility has also impacted profitability.

That said, should its logistic park plans materialises, PT Resources will be in a good position to ride on the expected increase in domestic demand as well as rising orders from existing customers in China.

If all goes well, this will eventually translate into positive run in its share price.


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