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Shareholders also approved today the group’s proposed subscription of 40 per cent equity interest in Dynacare Sdn Bhd, a wholly-owned unit of Johan Holdings Bhd, for RM40 million, or RM1 per share.

In a statement today, chairman Tan Sri Tan Kay Hock said the contract would boost the engineering’s company’s order book significantly.
“The contract also marks our entry into the glove manufacturing facility construction space. Demand for such facilities remains strong,” he said, adding that the group’s investment into Dynacare would provide an important new stream of sustainable and recurring long-term income its shareholders.

According to Tan, George Kent will undertake the works including civil and structural building works, mechanical and electrical works, and the construction of utility connections such as electricity, gas and water supply, as well as wastewater treatment and water recycling facilities.

It will also design, install, test and commission 42 double-former glove-dipping lines and all ancillary systems at the plant over 24 months.

George Kent said the plant would have a production capacity of about 12 billion pieces of examination and surgical gloves per annum. The commercial production of the first production line is expected to start in August with a total of six production lines to be fully operational by December 2021.

The remaining 36 production lines will be commissioned and operationalised in stages in 2022 and 2023. — Bernama

At George Kent’s shareholder meeting held today, a total of 35 shareholders voted in favor of entering the new business, accounting for 99.923% of the total voting shares.

Judashang also approved the acquisition of a 40% stake in Dynacare Sdn Bhd, a wholly-owned subsidiary of Johan (JOHAN, 3441, main board financial stock).

George Kent entered the glove and other medical product manufacturing business through the acquisition of Dynacare.

Extra large also allowed George Kent to participate in the construction of the glove factory, with a total value of about 624.1 million ringgits.

When the market closed on Tuesday, George Kent reported 75 sen, up 1 sen or 1.35%, with a trading volume of 435,800 shares.

George Kent said its FY21 performance was primarily attributed to robust sales of the group’s water meters worldwide.

“The group continued to receive water meter orders in spite of continuing people movement controls in Malaysia and around the world since the beginning of last year.

“This demonstrates the resilience and growth of the metering business. The group continued to adhere to prevailing standard operating procedure in managing its production activities,” it said.

George Kent chairman Tan Sri Tan Kay Hock said he is optimistic about the group’s prospects, given its ongoing operating and long-term plans.

These long-term plans include the group’s strategy to continue to develop the markets for its water meters which are already the market leaders globally.

“To complement our existing range of water meters by increasing the product portfolio, our R&D team is collaborating with partners and specialists to commercialise a range of other water meters, including smart meters. The enlarged portfolio will accelerate the expansion of our global market footprint,” he said.

Tan also noted that the contract to design and build Dynacare’s glove manufacturing plant is an exciting opportunity for the group.

“The contract will boost our construction order book significantly. The contract also marks our entry into the glove manufacturing facility construction space. Demand for such facilities remains strong,” he said.

Meanwhile, he said the group’s investment into Dynacare through a 40% equity stake will provide an important new stream of sustainable and recurring long-term income for its shareholders.

He added that the group will continue to develop new opportunities in the regional railway space, leveraging its established network with international rail specialists and expertise as a rail systems specialist in domestic railway projects.

George Kent’s share price closed 0.5 sen or 0.68% lower at 73.5 sen today, valuing the group at RM416.81 million.

Hong Leong Investment Bank Bhd (HLIB) said necessary approvals from the Ministry of Trade and Industry, the US Food and Drug Administration and European authorities remained pending and this would delay GKent’s new venture.

GKent originally targeted to start construction of a new glove plant in July this year, with the first line installed by August this year.

“We anticipate delays on the back of lockdowns and capacity constraints. All this coupled with declining average selling price (ASP) outlook could see GKent’s window of opportunity narrowing,” HLIB said.

GKent shareholders approved the company’s plan to build a glove manufacturing plant in Lumut Port Industrial Park, Perak for RM624.1 million.

Shareholders also approved GKents’s subscription of a 40 per cent stake in Dynacare Sdn Bhd, a wholly-owned unit of Johan Holdings Bhd, for RM40 million or RM1 per share.

Meanwhile, HLIB said GKent’s metering arm remained resilient on the manufacturing side amid ongoing difficulties with a 60 per cent manufacturing cap.

“Nonetheless, we continue to expect the segment to remain steady in 2021 driven by continued penetration into new markets, reaping benefits from its licensing agreement with Honeywell.

“Moving ahead, GKent foresees opportunities for penetration into Vietnam given the investments planned to increase water access further there,” HLIB noted.

As for the construction segment, HLIB expects GKent’s outstanding order book for both hospital projects to be RM64 million as of the end-March this year, while its LRT3 order book, with joint venture-accounted, at RM2.9 billion.

Both hospital projects should be on course for completion this year.

Should GKent’s 40 per cent-owned glove JV proceed, the company would be awarded a RM624 million related-party transaction(RPT) contract, of which RM213 million would be civil/infrastructure nature, the firm noted.

HLIB also noted that GKent had not secured any external jobs since LRT3, missing out on tenders of late.

Some outstanding tenders the company is participating in include various water-related and hospital jobs ranging from RM150 million-RM400 million in Peninsular Malaysia, Sarawak water treatment plants worth a combined RM1 billion and Rasau water scheme.

HLIB maintained a “Hold” call on GKent with an unchanged target price of RM0.78 and made no changes to its earnings forecasts.

“Overall, we see a longer-term mixed outlook for its core business while we remain cautious on execution risks for the glove JV,” the firm said.