Chin Hin buys engineering, project management firms for RM51 mil in cash and share deal

• Chin Hin is acquiring the stakes in CSS Engineering & Construction Sdn Bhd (CEC) and Critical System Specialist Sdn Bhd (CSS) from two individuals, with total cash of RM26.51 million and 7.91 million shares at RM3.16 apiece of RM25 million.

KUALA LUMPUR (Aug 6): Chin Hin Group Bhd (KL:CHINHIN) is acquiring a 65% stake each in two companies — an engineering and construction firm and a facilities and project management outfit — for RM51.51 million in a cash and share deal.

Chin Hin is acquiring the stakes in CSS Engineering & Construction Sdn Bhd (CEC) and Critical System Specialist Sdn Bhd (CSS) from two individuals, with total cash of RM26.51 million and 7.91 million shares at RM3.16 apiece of RM25 million.

The consideration shares are valued at a premium of 4.98% or 15 sen to Chin Hin’s shares in the market, which closed at RM3.01 on Tuesday.

The two individuals selling the shares are Liew Choon Fui and Teng Bee Ling, its filing showed.

"CSS and CSE are pioneers in engineering, procurement, construction and commissioning (EPCC) of data centres (DC) in Malaysia. The companies’ customers include some of the biggest names in the financial, telecommunications, logistics and supply chain sectors such as Bank Negara Malaysia, Starhub, Macquarie, DHL and NTT Communications," Chin Hin said in a separate statement.

CSS, according to Chin Hin’s filing, is in the midst of completing main contractor work for Sarawak Digital Economy Corp’s container data centre project, with 90% progress to date.

Meanwhile, CEC’s recent works were completed in 2022, including as subcontractor for Telekom Malaysia Bhd to undertake mechanical and electrical services at TM Kelana Jaya and TM Iskandar Puteri Data Centre (IPDC) in Johor.

The sellers have provided an after-tax profit guarantee of RM12.39 million to RM3.5 million in the financial year ended Dec 31, 2023 (FY2023), and RM8.89 million in FY2024.

"We anticipate clear profit visibility, supported by RM388 million in CSS’ order book upon the completion of the transactions," said Chin Hin group managing director Chiau Haw Choon.

"With CSS’ 21 years of proven expertise in EPCC, we are well-prepared to capitalise on the booming growth in the data centre sector," he said.

Chin Hin could also provide building materials such as concrete lightweight panels and blocks, steel structures, metal roofing and insulation which are commonly used for data centre engineering and structural works, the company said.

Chin Hin shares closed six sen or 2.03% higher at RM3.01, giving it a market capitalisation of RM11.03 billion. The counter is up 70.5% this year.

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