48 Sen Possible For Anzo

48 SEN POSSIBLE FOR ANZO

A market expert is betting on Anzo Holdings Bhd to inch up tomorrow to hit limit up with the announcement of a new substantial shareholder as early as this week. The stock closed 18 last Friday with 308 million shares traded. The highest it went to was 20.5. It was the top 10 most actively traded counter.

So why is Anzo in the watch of investors?

Firstly, there is a lot of talks that an investor linked to a huge global fund from either China or Hong Kong will end up as a substantial shareholder in Anzo this week. It is unclear if the investor will also pump in new business in Anzo, or is he just taking a stake that could exceed 10 per cent.

Already last week CSTME Resources Bhd took a 12 per cent stake in Anzo. Anzo has been flying high recently after winning a RM1.3 billion contract with a South Korean group to supply copper to them over a period of 40 months.  

CSTME is one of the major importers and exporters of non-ferrous materials in Malaysia, specialising mainly in copper products. The company will export the products to the South Korean group for Anzo.

Anzo also recently entered into the glove manufacturing business where the factory will produce up to 1.2 billion pieces of gloves a year worth almost RM400 million. If you look at all these deals, and the posibility of new substantial shareholder coming in this week, it is without a doubt there will be interest in this stock.

The market has been watching several counters which have been trading actively despite the Covid-19 pandemic. The majority of these counters are involved in healthcare and related service including glove manufacturing, and technology. 

Even oil & gas counters have moved up quite a bit since early June this year post-movement control order (now in the stage of recovery MCO). Analysts are fairly optismistic about the business growth trajectory for Anzo.

If you look at charts or graphs of historic earnings and revenue of Anzo, it shows how the company has been building its business over time. Anzo is expected to return to the black in its current financial year ending July 31, 2020 as it will have some revenue from the copper business, which started last week.

In my opinion, Anzo seems to be in a fairly good position when it comes to managing its cash flow and resources. And if the company wants to expand, it could always raise more funds for growth.

A listed company can raise new cash through issuing shares or taking on debt. 

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