ERDASAN 0072 Share Price

AT Systematization Bhd has inked a provisional agreement to sell its rubber medical gloves in China and Taiwan. In a bourse filing, the group said its wholly-owned subsidiary AT Glove Engineering Sdn Bhd today entered into a provisional offtake agreement to sell the gloves in the two countries via Kstar Healthcare Sdn Bhd. Under the deal, the subsidiary will manufacture, assemble and deliver the gloves to KStar, a private limited company involved in the marketing and selling of approved medical and healthcare equipment and products. AT Systemization said the agreement will last for 12 months, with a possibility of being automatically renewed.

AT Systemization Bhd is raising RM99.31 million through another private placement, which will involve it issuing up to 750.04 million shares or 20% of its total issue price. RM71.16 million would be used for its glove business and RM25.09 million for working capital, with the balance to be used to defray expenses related to the exercise, which it expects to be completed by the first quarter of next year. It just completed private placement involving 679.97 million shares for RM43.27 million in proceeds (for its glove business) last week.

Trading volume of AT Systematization Bhd shares, among the list of companies that have ventured into rubber glove manufacturing, soared to 2.66 billion shares, accounting for 23% of the total volume of shares traded on Bursa Malaysia yesterday. The stock has been on the climb since late October when the company released an update to its rubber glove venture. On Oct 28, the company said it expected to reach an annual production capacity of up to 2.6 billion pieces of medical-grade nitrile gloves by June 2021, based on the assumption that its production lines run 24 hours per day and 30 days per month.

AT Systematization Bhd which is building its glove manufacturing factory in Perak, expects to reach a production capacity of up to 2.6 billion pieces of medical-grade nitrile gloves per annum by June 2021. Assuming it sustains maximum production capacity throughout and the average selling price of nitrile gloves hits US$80 per 1,000 pieces, AT Systematization believes the new venture will earn the group RM860 million in annual turnover, which is over 40 times the RM20 million achieved in its financial year ended March 31, 2020.

In Financial Year End 2020, the directors’ remuneration was 1.2 million. It was fair compared to average in listed companies, considering the employees’ remuneration of 7.8 million and auditor’s remuneration of 107 thousands

The negative sentiment surrounding rubber glove makers has not sparred the new players, which also came under selling pressure today. AT Systematization Bhd emerged as the ninth-most actively traded counter with 136.41 million shares changing hands. The firm, which has plans to acquire six glove-dipping lines, finished at its intra-day low of 8.5 sen, falling 5.56% or half a sen. YTD, it is up by 125%.

Group recorded revenue of RM5.55 million for 1Q2020 compared with RM6.25 million for 4Q2019. The decrease was due to lower orders from contract manufacturer, textile and disk drive manufacturing. Group’s post-tax loss was RM8.97 million as compared to pre-tax loss of RM2.46 million in the preceding quarter. The loss was due to temporary suspension of the Group’s operations affected by MCO and mark-tomarket loss on quoted investment.