Shares in Mainboard-listed Khong Guan Limited surged by 19.34% or 17.5 cents to $1.08 around 11.20am, reaching a month-long high. Around 2,600 shares were traded then.

 

Shares in the company opened at 90.5 cents on Jan 23. The company has not called for a trading halt there were no announcements in January either.

 

At around 2.52pm on Jan 23, some 10,300 shares in the company changed hands.

 

Year-to-date, shares in Khong Guan are up by 17.39%, although the company&rsquo s shares are down by 7.69% on a y-o-y basis.

 

For the FY2024 ended July 31, 2024, Khong Guan reported a deeper loss of $1.4 million, compared to $286,000 in FY2023. FY2024 revenue fell by 2% y-o-y to $70.2 million, which was attributed mainly to &ldquo challenging market conditions&rdquo faced by the group&rsquo s subsidiaries.

 

KHONG Guan has signed a shareholders' agreement effective Monday with SGProtein founders and investors to invest in a 30 per cent stake in the producer and seller of plant-based meat alternatives for S$1.5 million in cash.

 

The paid-up share capital of SGProtein is expected to be S$3.95 million, comprising 2.08 million new shares. The deal will result in SGProtein becoming Khong Guan' s associated company.

 

The founders will be the key management personnel that supervise the operations of SGProtein.

 

In a filing to the Singapore Exchange, the biscuit manufacturer said: " This investment is in line with our broader strategy for increasing shareholders' value through growth, leveraging on our management' s expertise and experience in the food businesses.

 

" The proposed investment in SGProtein represents a new and exciting opportunity for growth for the company in Singapore and the region, which are expected to offer a nascent but growing and potentially sizeable market for plant-based food products."

 

The investment in SGProtein will be funded through internal resources, and is not expected to have any material impact on Khong Guan' s net tangible assets and earnings per share for FY21.

 

In addition, Khong Guan chairman Chew Soo Lin and Michael Chew (son of managing director Chew Soo Eng) have each agreed to subscribe personally for new shares in SGProtein amounting to 2 per cent. Both do not have any existing interest in SGProtein prior to this.

 

The audit committee is of the view that the risks and rewards for the company and each of the Mr Chews are in proportion to their respective interest in SGProtein, and the terms of the investment are not prejudicial to the company' s and its shareholders' interests.