Chin Hin ups stake in Chin Hin Group Property to 57.13% amid share price rally

• The 3.39% stake, or 22.39 million shares, in CHGP was purchased at an average of RM1.305 per share between March 19 and April 4, 2024, according to Chin Hin's bourse filing on Friday.

KUALA LUMPUR (April 5): Chin Hin Group Bhd has acquired an additional 3.39% stake in Chin Hin Group Property Bhd (CHGP) for RM29.26 million, increasing the group’s stake in its listed property and construction arm to 57.13% from 53.74% previously. 

The 3.39% stake, or 22.39 million shares, in CHGP was purchased at an average of RM1.305 per share between March 19 and April 4, 2024, according to Chin Hin's bourse filing on Friday.

"The purchase consideration was based on the prevailing market price of CHGP's shares," it added.

In the past one month, CHGP shares have gained about 70%. At the time of writing, the counter was trading three sen or 1.62% lower at RM1.82, giving the group a market capitalisation of RM1.2 billion.

Chin Hin shares have risen about 10% during the same period. At the time of writing, the stock was down four sen or 0.91% to RM4.36, valuing the group at RM7.72 billion.

According to Chin Hin, the stake purchase in CHGP, which was entirely internally funded, is premised on CHGP’s prominent future earnings prospects and order book in the construction business.

The average purchase price represents a 2.61% discount versus CHGP’s average share price of RM1.34 over the 12-day trading period, based on back-of-the-envelope calculations.

Financially, strong earnings from Chin Hin’s joint ventures (JVs) and associates, as well as a RM10.23 million disposal gain from a unit, helped the group post a 55% rise in net profit for the financial year ended Dec 31, 2023 (FY2023) to a record high of RM150.11 million from RM96.83 million a year ago.

The group’s full-year revenue also charted a fresh all-time high of RM2.06 billion, up 26.2% from the previous record of RM1.63 billion in FY2022, on higher building material sales. 

Likewise, CHGP achieved a record net profit of RM34.58 million for FY2023, an over four-fold rise from RM7.62 million a year ago, which was mainly attributed to higher share of results of a JV company and several major ongoing construction projects.

It also posted a record top line of RM601.77 million, an 84% increase from RM327.02 million previously, mainly on the back of higher contributions from its property division and higher work progress of construction projects from its construction division.

On its prospects, CHGP said its property development segment is preparing to launch three new projects with an aggregate gross development value (GDV) of RM1.51 billion.

This comprises Andalan Residences with a GDV of RM247 million, as well as Botanica Hills with a GDV of RM569 million, and a resort-themed mixed development in Melaka with a GDV of RM690 million.

As at end-December 2023, the property development division had total unbilled sales of RM521.2 million.

On its construction segment, CHGP said it expects a gradual improvement in contract flows and participation in the construction of the group’s property development projects.

“As at Dec 31, 2023, the construction segment’s outstanding order book was at RM1.1 billion,” CHGP said in its financial results filing dated Feb 29, 2024.

Chin Hin executive chairman Datuk Seri Chiau Beng Teik and his son and managing director Chiau Haw Choon hold an indirect interest of 57.13% in CHGP via their family vehicle PP Chin Hin Realty Sdn Bhd.

“Accordingly, the interested directors have abstained and will continue to abstain from all deliberations and voting at the relevant board meetings in respect of the acquisition,” Chin Hin said.

Beng Teik owns a direct stake of 20.27% in Chin Hin while Haw Choon holds 5.75%. The duo also hold an indirect stake of 37.68% in the group.

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