Chin Hin Group to Boost Ownership in Ajiya Bhd to 66.36% with RM54.2 Million Deal
Chin Hin Group Bhd (KL:CHINHIN) has announced plans to acquire an additional 12.27% stake (37.38 million shares) in Ajiya Bhd (KL:AJIYA) for RM54.2 million, increasing its total ownership to 66.36% from 54.09%. The purchase price of RM1.45 per share represents a 9.9% discount from Ajiya’s last traded price of RM1.61 on Friday.
This strategic acquisition is part of Chin Hin’s ongoing expansion efforts in the construction materials sector, strengthening its position in metal roofing and safety glass manufacturing.
Strategic Growth and Construction Industry Outlook
According to Chin Hin’s Bursa Malaysia filing, this acquisition aligns with its long-term strategy of increasing stakes in companies with strong profitability and future growth potential.
“Ajiya is well-positioned to benefit from Malaysia’s anticipated recovery in property development and construction,” said Chin Hin’s board in the filing.
Despite a 38.3% decline in net profit to RM34.17 million for the 12-month period ending Nov 30, 2024, Ajiya’s total revenue increased 16.1% to RM353.87 million. The company’s unaudited net assets per share stood at RM2.16 as of Nov 30, 2024.
Chin Hin expects the acquisition to be fully completed by Q3 2025, with funding from a mix of internally generated funds and borrowings.
Chin Hin’s Expanding Influence Over Ajiya
Chin Hin initially acquired a 24.68% stake in Ajiya in March 2022 at RM1.45 per share for RM104.4 million, becoming Ajiya’s largest shareholder. In September 2023, Chin Hin launched a mandatory general offer (MGO) after raising its stake to 34.1%, eventually securing 55.85% ownership.
The recent move further consolidates Chin Hin’s control over Ajiya, strengthening its vertical integration in the construction materials sector.
Ajiya’s RM250 Million Loan to Chin Hin
In May 2024, Ajiya approved a RM250 million loan to Chin Hin at an annual interest rate of 7.5%, to be drawn over 24 months. Out of this sum, RM110 million has been allocated for acquisitions in the construction sector, underlining Chin Hin’s aggressive growth strategy.
Notably, Chin Hin’s major shareholders, Chiau Haw Choon and Datuk Seri Chiau Beng Teik, hold executive roles in Ajiya, further integrating the two firms’ leadership and operations.
Stock Market Performance
Following the announcement:
- Chin Hin’s shares declined by 3 sen (1.3%) to RM2.34, giving it a market capitalization of RM8.28 billion.
- Ajiya’s shares surged by 15 sen (10.3%) to RM1.61, pushing its market capitalization to RM490.38 million.
This acquisition signals Chin Hin’s continued ambition to dominate Malaysia’s construction materials sector, leveraging Ajiya’s expertise in metal roofing and safety glass. With ongoing infrastructure development and property market recovery, the group remains well-positioned for future growth.
