Lay Hong: We’ll know who new major shareholder is within a week

KLANG: Lay Hong Bhd is in the dark as to who the new substantial shareholder in the group is, its group executive director said, explaining, however, that it should find out within a week’s time.
“We have yet to receive any notification (from QL Resources) on who actually has taken up the shares. We will know within a week, because they have to submit the (share registrar) report to us,” its group executive director Yap Chor How told reporters after its AGM yesterday.
“I hope that we’ll get a more friendly party. (One that is) not in the same industry will be better, as (otherwise) it can cause a lot of conflict in corporate decisions,” Lay Hong’s group managing director Yap Hoong Chai added.
Lay Hong and QL Resources’ principal business is integrated livestock farming.
QL Resources was once the second largest shareholder of Lay Hong. It launched a takeover bid for Lay Hong after its representative was voted out of the latter’s board last year. However, the takeover bid failed as QL Resources did not manage to increase its shareholding in Lay Hong to the threshold level of more than 50% of voting shares by the deadline.
QL Resources last Friday disposed of its entire 38.63% shareholding in Lay Hong at RM3.05 a share, on the grounds that it was unable to influence Lay Hong’s corporate direction as it did not have any board representation. Filings with Bursa Malaysia, however, did not show the identity of the new major shareholder.
The Yap family, which founded Lay Hong, is the single largest shareholder of Lay Hong with a 44% stake.
Meanwhile, Hoong Chai reiterated that QL Resources’ exit from Lay Hong will not affect the company’s business as it is independent.
“We can run our business by ourselves,” he said, adding that Lay Hong will still purchase its raw materials from QL Resources.
On its financial performance, Hoong Chai said he expects Lay Hong’s net profit to grow in single digit for its financial year ending March 31, 2016 (FY16), driven mainly by its egg and chicken operations.
Operationally, he said, the group has allocated RM20-RM30 million in capital expenditure for FY16, to be used mainly to improve its farm and manufacturing capacity. Currently, it produces 1.6 million eggs a day and 2 million broiler birds a month.
Lay Hong has three main business segments – processed chicken products such as frankfurters, nuggets and fried chicken, broiler birds and eggs. The chicken and chicken-related products segment contributes 60% to the group’s revenue and the egg division, 30%.
For the first quarter ended June 30, 2015, its net profit increased 66% to RM2.58 million, compared with RM1.55 million a year ago, due mainly to lower costs of raw materials, while revenue slipped 1.04% to RM154.55 million, from RM156.17 million previously.
On prospects, Chor How said he expects poultry product selling prices to remain stable and its group should be able to continue to operate profitably in its current financial year.