Special Situation in Bursa: KIMHIN & SCOPE

Disclaimer: This article is in no way financial advice, nor solicitation to buy or sell shares in this company. It is purely for educational purposes only. You are highly recommended to conduct all necessary due diligence and make your own informed decisions before making any financial decisions. The writer do not own shares in this company and may at any point in time increase or reduce their position without prior notice. Do not try to copy trade without understanding the risks!

There are quite a few interesting special situations arising in Malaysia’s Bursa market recently:

1. Kim Hin Industry (KIMHIN): Existing major shareholder of KIMHIN launched voluntary offer with RM0.85 offer price to privatise the company, when the share price of KIMHIN is RM0.46. [4 July 2025]

2. Scope Industries (SCOPE): Proposed disposal of its subsidiary for RM96.7 mil cash, when the market cap is only RM98.2 million. [26 June 2025]

Before we dive deep, you need to understand what is special situations first:

In a normal situation, when we invest in a stock, we will need to:

1. Estimate the future growth of the business;

2. Estimate how much the company is worth (VALUE); and

3. Invest only if the current share price (SHARE PRICE) is less than what we think the company is worth.

[The above number is example for you to better understand only]

For example, the current profit of Maybank is RM10 billion. If we think Maybank will grow 10%, Maybank’s profit is estimated to be RM11 billion next year. Assuming a 10x PE, Maybank is estimated to worth RM110 billion (or ~RM9.10/share). If Maybank share price is below RM9.10/share, then you can consider investing in Maybank stock.

In short, you invest only when SHARE PRICE < ESTIMATED VALUE.

However, no one knows the REAL VALUE of a company, because growth and PE may not be what you expect. That’s why, some investors focus on special situations that give investors more information on the REAL VALUE of a company.

Once in a while, company will take corporate actions, e.g. disposal of assets, issuance of special dividends, takeover offers etc. In this kind of situation, investors will have a glimpse on the REAL VALUE of a company.

Last week in Bursa, 2 special situations arise, so let’s dive deep into it.

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