SINGAPORE (July 1): Heah Theare Haw, a substantial shareholder of Geo Energy Resources, has bought more shares on the open market on June 21. The Singapore Exchange filing dated June 24 shows Heah bought two million shares at 15.3 cents each.
Heah purchased the shares when the stock was trading at a 52-week low, following an announcement made by the group on June 13 declaring a flood emergency status for 14 days from June 10 to 23 at its Indonesian mine owned by its subsidiary Tanah Bumbu Resources. The flood was said to have affected the production and delivery of coal.
In a subsequent announcement, the company noted that the weather condition had since improved and as at June 21, normal production and delivery of coal had resumed.
See also: Geo Energy signs offtake deal with Trafigura to replace Engelhart CTP
Following this acquisition, Heah’s stake in Geo Energy has increased from 5.96% to 6.11%, or about 85.5 million shares. The recent purchases were the first he made in more than three years. Heah last bought 3.5 million Geo Energy shares on Feb 2, 2016. He paid 12.2 cents each then.
Heah’s recent purchase was at a much lower price than that paid by another significant shareholder, Macquarie. On Nov 8, 2018, Geo Energy issued 70 million new shares at 29 cents each to the Australian financial institution, giving it a stake of 5%.
Macquarie also subscribed for 74 million non-listed, transferable, free warrants in Geo Energy that it can exercise within two years from the issue date. Each warrant carries the right to subscribe for one Geo Energy share at 33 cents a share.
Heah seems to be the only substantial shareholder who has taken the opportunity to snap up Geo Energy shares at a low this time. For now, he remains the fourth-largest shareholder of Geo Energy. The company’s chairman, Charles Antonny Melati, is the largest shareholder with a stake of over 20%.
Apart from Geo Energy, Heah is a substantial shareholder of locally listed ASTI Holdings, with a 6.08% stake. ASTI was recently placed on the SGX watch list for reporting three consecutive financial years of pre-tax losses and an average daily market capitalisation of less than $40 million over the last six months.
Heah also invested in the IPO of Malaysian furniture maker LY Corp on the Catalist board in January last year.
Year to date, shares in Geo Energy have declined 9.52% to close at 15.3 cents on June 26. At this level, the company has a market value of $212.7 million.
In its latest 1QFY2019 results announcement, Geo Energy recorded a loss attributable to owners of the company of US$8.7 million ($11.8 million), compared with earnings of US$9 million in 1Q2018.
Revenue in the same period decreased 27% y-o-y to US$65.7 million, which the company said was attributed to lower coal prices. The company incurred significantly higher general and administration expenses of US$3.8 million during the period, up 47% y-o-y.
There are currently two active analyst coverage on the stock. Phillip Capital has a “neutral” recommendation with a price target of 15 cents, while KGI Securities has a “hold” call with a price target of 19 cents.
