Tuesday, June 10, 2014

Eng Kah - Substantial Shareholder Emerged

Tan Thiam Hock emerged as a substantial shareholder in Eng Kah Corp, has dismissed any potential alliance between the manufacturer of personal care and household products and privately held Alliance Cosmetics Group which Tan founded.

He emerged with a 5.03% stake in Eng Kah Corp.

ACG owns the Silky Girl, Stage and SG Men Brands and distributes. ACG is currently (June 2014) a customer of Eng Kah, contributing several % to its revenue. Private equity funds Ekuiti Nasional Bhd and Navis Capital Partners own an 80% stake in ACG. While Tan is no longer the head of ACG which he has a seat on the board.

Its revenue in FY2013 was the lowest in the past five years while profit also came in second lowest slightly above FY2009’s.

At current price (June 2014), it is trading at a 21.48 times to FY2013 earnings.

As at March 2013, it had zero borrowings and had a net cash of rm17.8 million.

It had a 30:70 JV with Cosway China Co Ltd. Cosway Malaysia is currently (June 2014) its major customer.

Other major shareholders of Eng Kah include CAM-GTF Ltd and Raffles-Asia Investment Co, which held a 9.59% stake and 5.31% stake respectively as at May 5 2014. Ewe Eng Kah and Neoh Lay Hwa holds 39.55% stake in the company.

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