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 Ajiyaโs last traded price of RM1.61 on Friday.
This strategic acquisition is part of Chin Hinโs 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 Hinโs Bursa Malaysia filing, this acquisition aligns with its long-term strategy of increasing stakes in companies with strong profitability and future growth potential.
โAjiya is well-positioned to benefit from Malaysiaโs anticipated recovery in property development and construction,โ said Chin Hinโs 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, Ajiyaโs total revenue increased 16.1% to RM353.87 million. The companyโs 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 Hinโs 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 Ajiyaโs 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 Hinโs control over Ajiya, strengthening its vertical integration in the construction materials sector.
Ajiyaโs 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 Hinโs aggressive growth strategy.
Notably, Chin Hinโs major shareholders, Chiau Haw Choon and Datuk Seri Chiau Beng Teik, hold executive roles in Ajiya, further integrating the two firmsโ leadership and operations.
Stock Market Performance
Following the announcement:
- Chin Hinโs shares declined by 3 sen (1.3%) to RM2.34, giving it a market capitalization of RM8.28 billion.
- Ajiyaโs shares surged by 15 sen (10.3%) to RM1.61, pushing its market capitalization to RM490.38 million.
This acquisition signals Chin Hinโs continued ambition to dominate Malaysiaโs construction materials sector, leveraging Ajiyaโs expertise in metal roofing and safety glass. With ongoing infrastructure development and property market recovery, the group remains well-positioned for future growth.
