Introduction

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KHIB wishes to announce that Kein Hing Thai Nguyen (Vietnam) Co., Ltd (“KHTV”), a wholly-owned subsidiary of the Company had on 12 May 2022 awarded a Construction Contract to a third party main contractor in Vietnam for the proposed construction of a single storey factory (KHTV Factory Phase II) on the industrial land located at Plot No. CN8-2, Diem Thuy Industrial Park, Diem Thuy Commune, Phuc Binh District, Thai Nguyen, Vietnam owned by KHTV for a total construction cost of Vietnam Dong 27,441,285,213 or approximately RM5.0 million (the “Proposed Construction”).

Rationale and Intended Use

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The Proposed Construction with a total built-up of approximately 53,000 square feet will cater for the future expansion plans of KHIB Group in Vietnam particularly the business of metal stamping, precision machining, assembly of components and fabrication of tools and dies. With the Proposed Construction, KHIB Group production and warehouse space are expected to increase by approximately 9% against its current total capacity. The growth in customers’ demand for parts and metal components in Vietnam has created great opportunity for KHIB Group to expand its manufacturing business in Vietnam. The Proposed Construction is strategically situated within the Diem Thuy Industrial Park, Thai Nguyen where business activities are expanding rapidly in recent years. Therefore, the intended use of the factory upon completion of the Proposed Construction would principally be engaged in the business of metal stamping, precision machining, assembly of components and fabrication of tools and dies mostly for the multinational corporation customers in Vietnam.

 Expected Date of Completion

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The construction of the Proposed Construction is expected to commence in May 2022, and barring any unforeseen circumstances it is expected to be completed by December 2022.

Financial Effect

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The Proposed Construction does not have any effect on the issued and paid-up share capital of KHIB or the shareholdings of its substantial shareholders, and does not have any material effect on earnings per share and net assets per share of the Group.

Capital Commitment

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The capital commitment of the Proposed Construction is approximately RM5.0 million.

Source of Funding and Gearing

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KHTV intends to finance the construction costs of the Proposed Construction through bank borrowings. Based on the latest audited financial statements of KHIB Group for the financial year ended 30 April 2021, the gearing ratio is expected to increase from 0.40 times to 0.44 times upon full drawdown of the loan for this purpose.

Interest of Directors, Major Shareholders and Persons Connected to Them

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To the best of the knowledge of the Directors of KHIB, none of the Directors and/or Major Shareholders of KHIB or persons connected with them, have any interest, direct or indirect, in the Proposed Construction.

Statement by Board of Directors

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The Board of Directors is of the opinion that the Proposed Construction is in the best interest of the Group.

This Announcement is dated 12 May 2022.