Ban Leong Technologies, a distributor of IT products, is steadily buying back its shares at a time when Ronald Teng Woo Boon, the company’s managing director and controlling shareholder, is raising his stake. The most recent buyback by the company was the acquisition of 600,500 shares on the open market on Dec 29 at between 34 to 35 cents each.
This brings the cumulative number of shares bought back under the current mandate to nearly 1.91 million units, equivalent to 1.703% of the total share base. Earlier buybacks were made on Dec 14, 19 and 31 with 174,000 shares at 35 cents each; 200,000 shares at 34.5 cents each and 163,300 shares at 34 cents each respectively.
Teng, who founded Ban Leong 30 years ago, added to his interest recently. On Dec 1, he acquired 10,400 shares on the open market at 36.5 cents each, bringing his direct stake to around 26.79 million shares. His wife, Teo Su Ching holds another 3.52 million shares. This gives Teng a total interest of just over 30.3 million shares, equivalent to 27.25%.
Before this, Teo had also raised her stake in the company. On May 29 and 30, she acquired 90,000 shares at between 36.5 cents and 37 cents each and 30,000 shares at 36.5 cents each respectively. In between, on July 31, one Lee Eng Khian, acquired 200,000 shares at 39 cents each, making him a substantial shareholder of the company with a stake of 5.05% from 4.87%.
As at Sept 30, Ban Leong had a net asset value of 37.83 cents, up from 25.93 cents as at Sept 30, 2022. Ban Leong, which was listed in 2005, has over the years built up a regional network distributing and supporting both consumer-oriented and business-facing brands, with overseas offices in Malaysia and Thailand.
As listed on Ban Leong’s website, these range from Korean electronics giants, LG and Samsung, to PC brands Asus, Dell and MSI to computer peripherals Logitech and Targus, smart watchmaker Suunto and even graphics chipmaker Nvidia, a hot AI stock in recent months.
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Ban Leong helps its principals distribute their wares via multiple means ranging from physical retail shops, direct corporate sales and online fulfilment. It provides marketing as well as aftersales support services.
In the most recent 1HFY2024 ended Sept 30, Ban Leong reported revenue of $102.43 million, up 2.1% y-o-y, with the increase mainly from its multimedia segment. According to Ban Leong, its retail and online segment recorded a decline in revenue but its business-to-business segment secured more projects and contributed to the overall higher revenue.
However, due to unfavourable forex and other reasons, the company reported earnings of $2.17 million, down 8.1% versus 1HFY2023. In line with the lower earnings, Ban Leong has declared a lower interim dividend of 0.6 cents for 1HFY2024, versus 0.75 cents for 1HFY2023.
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“While there remain opportunities to explore new business initiatives, the group will adopt a conservative approach in evaluating any new business opportunities. The conflicts in various parts of the world may impact the business and consumer sentiments in the demand of IT products, though we expect ongoing development of innovative electronic and IT gadgets,” states the company in its earnings commentary.
Besides its core businesses, Ban Leong has started investing in other entities in a bid to generate another way to grow. This past year, it invested US$1 million ($1.33 million) by issuing a convertible loan to a company called Oaxis Holdings, which develops software giving parental control of smartwatches suitable for children. “Such products, when fully developed, would present a good opportunity to leverage on our company’s sales channels and market presence to achieve better sales and margins,” the company says.
