PCCS says planned venture into medical sector does not breach listing requirements

TheEdge Fri, Dec 18, 2020 09:59pm - 3 years View Original


KUALA LUMPUR (Dec 18): Apparel company PCCS Group Bhd has clarified that its proposed venture into the medical and health sector via a partnership with Chinese firm Shanghai Shenqi Medical Co Ltd does not breach its listing requirements.

“The board did not anticipate that the establishment of this strategic cooperation relationship would cause a diversion of 25% or more of PCCS’s consolidated net assets from the group’s existing business and thus does not breach Paragraph 10.13 of the Main Market Listing Requirements,” said PCCS in a filing with Bursa Malaysia today in response to queries on the proposed venture.

Bursa also asked PCCS to provide further elaboration on the group’s experience and capability to act as exclusive distributor of medical products considering that the group’s existing business is mainly involved in garment and apparel manufacturing-related business.

PCCS, in response, said the group has been very much involved in conducting businesses within the Asia-Pacific region for many years, and therefore has a profound understanding and strong influence over many different market segments within the  region.

It added that its board will subsequently identify the right talents in the related fields for PCCS to be successful in the venture.

PCCS also said that it has received strong committed support from Shenqi on the technical, experience and knowledge aspects, including assigning its professional team to assist the group in obtaining approval for the launch of its products in each country.

On Dec 15, PCCS inked a Memorandum of Understanding (MoU) with Shanghai Shenqi Medical to pursue the potential healthcare business opportunities within the Asia-Pacific region.  This cooperation was to also enable PCCS to strategically position itself in the medical and health sectors.

The partnership was also intended to develop the commercialization of cardiology-related medical device technologies by leveraging the strengths of both companies.

In its filing with Bursa today, PCCS said it expects the MoU to be valid until both companies sign an exclusive distributor agreement before June 30, 2021.

It added that its subsidiary La Prima Medicare Pte Ltd might be nominated as an entity to enter into an exclusive distributor agreement.

PCCS said the financial commitment for the venture has not been ascertained as it expects nothing material in the current financial year ending March 31, 2021 as both companies are still in the stage of strategic deployment.

PCCS’s share price closed unchanged at 46 sen after 735,000 shares were traded. At the current price, its market capitalization stands at RM97.35 million.

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