The Hadhari Golden Goose

Wonderful Magical Corporation should be the new name for Welli-Multi Corporation (WMC). The way the shares were pursued all day in huge blocks speak volumes of the future prospects of this company. I believe a lot of of the buyers today are foreigners, possibly from China or the Middle-east. I hope they are here in WMC for the long haul

Yet yesterday WMC was only worth RM1.06 per lot. Stranger than fiction.

So what magic happened overnight? Just an article in THE STAR saying Hadhari Cattle Industries was buying some 19% (16 million shares) of WMC at RM1.50 apiece. This comes to something like RM25 million in cash.

Just imagine, it went limit down a week ago because of SC sanction on its annual and quarterly reports. Memory is certainly short!

This morning it went limit up and in the afternoon it went as high as RM 1.63, closing two sen lower at RM1.61 for a fantabulous 56 sen gain.

Let us look at the news report a little closely.

Apparently, Hadhari is in the final stages of negotiations to acquire this strategic stake. It should be signed, sealed and delivered in less than 2 months. My opinion- look no further; it is a done deal.

Hadhari is a Kedah-based company set up in mid-2006, specialising in integrated halal cattle farming and meat processing. Hadhari's owners via Hadhari Cattle Chi Feng Pte Ltd, have also been operating a halal cattle farming and meat-processing business in Inner Mongolia since 1999. The average turnover of Hadhari is RM1bil a year and its products are mainly exported to the Middle East.

Hadhari main intention to invest in WMC is because the latter’s factory in Seberang Prai was halal-certified. To me, this reason "tak masuk akal"as Hadhari can also apply to JAKIM for that status since the nation is currently in the throes of setting up halal hubs in every state. That they want to produce halal food products, such as downstream beef products, gelatin and gelatin capsules using the factory is more palatable.

To me, this represents the first foray of Hadhari into WMC and they will be buying more stakes to take over majority control in due time. Expect prominent players like the Kedah State Government, some GLCs, the Chinese machinery company and possibly international Islamic investment corporations such as the Kuwaiti Investment houses to buy in at a later stage when WMC undergo a full make-over towards a new global image.

For the nine months to Sept 30, 2006, WMC posted a lower net profit of RM2.34mil against RM3.07mil in the previous corresponding period despite a 13% rise in revenue to RM473mil.

Last month, WMC aborted the purchase of 65% of Hagecap Sdn Bhd, a gelatin-capsule producing company based in Seberang Jaya, because WMC wanted to invest in newer halal gelatin-capsule technologies with larger capacities. This is credible.

Let us see how long this buying frenzy will last.

Heartsong