KUALA LUMPUR (Nov 2) – Investors chased LUSTER INDUSTRIES BHD [] shares and warrants, pushing securities of the precision plastic component manufacturer up as much as 10% in early trade.
This follows the company's updated announcement that it has finalised its revised regularisation plan, and will apply to regulators to lift the firm out of its Practice Note 17 (PN17) status.
Dealers said Luster shares have an upside potential of between 10% and 20%, but that depends on stock market sentiment, and whether the company will come out from its PN17 status in the near term.
”It depends on whether Luster will be successful in its application," a dealer told theedgemalaysia.com over telephone on Friday. Should the regulators reject Luster's application, that could have a negative impact on its share price, the dealer said.
At 11.15am today, Luster shares were traded at 11 sen with some 22 million shares done after rising as much as 10% or one sen to 11.5 sen earlier. The stock closed at 10.5 sen yesterday.
Meanwhile, its warrants were unchanged at 7.5 sen with about 12 million units traded after climbing 7% or 0.5 sen to eight sen earlier.
Luster is the most actively-traded stock across the exchange while its warrant is the tenth most active entity.
In a statement to the bourse yesterday, Luster said it had completed its revised regularisation plan on June 12 this year. Hence, it will apply to Bursa Malaysia to lift the company from its PN 17 status.
This comes with the condition that Luster registers net profit for two consecutive quarters immediately after the completion and implementation of the regularisation plan, the company said.
Luster's latest financials show that the company had posted profits against losses a year earlier on extraordinary gains, and income from newly-acquired subsidiaries, according to notes accompanying its results.
Net profit came to RM31.89 million in the second quarter (2Q) ended June 30 versus a net loss of RM1.32 million a year earlier as revenue rose 88% to RM19.92 million from RM10.61 million.
The 2Q numbers translate into cumulative first-half net profit of RM28.86 million against a net loss of RM3.27 million a year earlier. Revenue was up 44% to RM28.88 million from RM20.12 million.
In the 2Q, Luster had recorded extraordinary gains of some RM33 million after its lenders waived the company's debts and interests, the company said.
Having posted profits in the 2Q, Luster’s 3Q results will be closely watched by investors to see if the company’s will fulfill regulators’ requirements for the company to be lifted out of its PN17 status.
Written by Chong Jin Hun of theedgemalaysia.com
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