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GKE resumes buybacks after 42 months; Luong streamlines hold over JEP

The Edge Singapore
The Edge Singapore  • 3 min read
GKE resumes buybacks after 42 months; Luong streamlines hold over JEP
GKE Corp is enjoying good earnings from its warehousing business / Photo: Albert Chua
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GKE Corp started a steady stream of buybacks this month, following a break of 42 months. Most recently, on April 17, the company acquired 300,000 shares on the open market at 7.133 cents each.

Earlier, the company had acquired 105,000 shares for 6.8 cents each on April 8, 175,000 shares at 7.2 cents each on April 11, 100,000 shares each at 7.3 cents each on April 15 and 200,000 shares at 7.2 cents each on April 16.

Following the transactions on April 17, GKE has bought back a total of 880,000 shares, equivalent to 0.1135% of its total share base. The last time GKE bought back shares on the open market was on Nov 3, 2020, when it acquired 50,000 shares at 7.9 cents each.

GKE’s most recent round of buybacks was made at a time when its share price had dropped significantly below its book value. As at Nov 30, 2023, its net asset value per share was 11.9 cents, down slightly from 11.92 cents as at May 31, 2023.

On Jan 12, the company reported revenue of $55.52 million for 1HFY2024 ended November 2023, up 2.1% y-o-y. However, earnings in the same period surged 90.1% y-o-y to $1.9 million as it enjoyed stable contributions from its warehousing operations, in particular, its more profitable chemical-related storage services.

Meanwhile, GKE says its infrastructural materials business in China, which had been suffering because of the slowdown in the market, is seeing some gradual recovery. “The stability in our Singapore and China operations demonstrated in the 1HFY2024 results is a boon to the group,” says CEO Neo Cheow Hui.

See also: UMS insiders, AEM independent director raise respective stakes; DBS CEO gains $13.8 mil in sale

“However, we remain steadfast in achieving stable and sustainable growth for the long term and continue to stay prudent in the management of our resources to ride through the uncertain times,” he adds.

Streamline control
Andy Luong, executive chairman of UMS Holdings 558 -

and JEP Holdings, has streamlined his control in JEP. In a married deal on April 12, Luong sold his personal direct stake of 7.3 million shares in JEP to UMS for $2.482 million or 34 cents each. That stake was equivalent to 1.77%.

See also: DBS CEO sells more shares, pockets proceeds of $13.8 million thus far this month

Luong no longer owns a direct stake in JEP. However, UMS, which was used by him to acquire the controlling stake in the former some years back, now holds more than 325.6 million JEP shares, equivalent to a stake of 78.84%, up from 77.07% previously.

As at March 22, Luong was listed as owning a deemed stake of more than 106.5 million UMS shares, equivalent to a stake of 14.99%.

Year to date, JEP shares have gained 4.69% as of April 17 while UMS shares are down 1.5%. JEP is more exposed to the aviation sector which is enjoying a clearer recovery trajectory following the pandemic.

UMS, on the other hand, is more squarely focused on the semiconductor sector which is recovering from the previous downcycle.

In 2HFY2023 ended last December, JEP reported earnings of $838,000, down 60% y-o-y from nearly $2.1 million made in 2HFY2022. Revenue in the same period was down 24.7% y-o-y to $28.6 million.

Despite the y-o-y drop, the company sees recovery taking place. “The overall business conditions are now gradually improving — as evidenced by the stabilisation of our sales and profit performance in 2HFY2023,” says Luong.

“Moving forward, the group will continue to maximise operational synergies with UMS to improve overall performance and seek new business opportunities,” says JEP in its earnings commentary.

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