KUCHING: WTK Holdings Bhd’s share price has continued its uptrend, closing at 63.5 sen last Friday, gaining 5.5 sen or nearly 10 per cent for the week.
The stock has climbed more than 65 per cent or 25.5 sen from its recent low of 38 sen in mid-July, hitting a six-year high.
Last Friday, WTK gained 1 sen to 63.5 sen on light volume of about 1.33 million shares, giving the company a market capitalisation of RM305.65 million. WTK has 481.3 million shares.
The Sibu-based timber and plantation company has been loss-making since the financial year 2019 (FY2019), when it suffered a group after-tax loss of RM114.2 million on revenue of RM589.7 million, compared to an after-tax profit of RM78.5 million on revenue of RM816.2 million in FY2018.
In FY2020, the losses worsened to RM162.9 million on shrinking revenue of RM353.4 million, as the timber segment posted a steep pre-tax loss of RM154.9 million due to weak demand for timber products such as plywood.
In the following two years, group after-tax losses were significantly trimmed: FY2021 (-RM8.2 million on revenue of RM395.4 million) and FY2022 (-RM2.55 million on revenue of RM473 million). The loss, however, deteriorated to RM19.3 million despite higher revenue of RM560.8 million in FY2023, and further worsened to RM43.9 million on revenue of RM671.9 million in FY2024.
In the first six months of 2025 (1H2025), WTK reported a group after-tax loss of RM3.85 million on revenue of RM294.7 million. The company made a major turnaround in 2Q2025 with an after-tax profit of RM17.44 million on revenue of RM138.2 million.
WTK’s timber segment returned to profitability, posting a pre-tax profit of RM650,000 in 2Q2025 as the group ceased its loss-making plywood manufacturing operations and sold timber subsidiaries. The poor-performing timber business, which included logging, downstream processing activities, and reforestation, had dragged and languished the group in the red zone over the years.
WTK’s share price began to recover after reporting its 2Q2025 financial results, with renewed investor interest following the company’s September 4 announcement of a proposed RM555 million cash acquisition of oil plantations and an oil mill in Sarawak.
Under the proposed deal, WTK will acquire a 100 per cent equity interest in Desacorp Sdn Bhd from WTK Realty Sdn Bhd (the largest shareholder in WTK), while its subsidiary BioPalm Ventures will buy a 70 per cent stake in Imbok Enterprise Sdn Bhd for RM290 million and a 70 per cent stake in WTK Oil Mill Sdn Bhd for RM35 million in a related-party transaction.
Desacorp manages 5,229 hectares of oil palm estates in Mukah, with 4,543 hectares planted — more than 90 per cent of which are prime mature and mature palms. Imbok owns 11,020 hectares of landbank with 9,846 hectares planted, where more than 80 per cent of the palms are immature and young mature.
Upon completion of the proposed acquisitions, expected in 1Q2026, WTK Group’s oil palm planted area will expand sizably by 68.1 per cent, or 14,389 hectares, to 35,519 hectares.
Desacorp, Imbok and WTK Oil Mill — which owns a palm oil mill — collectively posted an after-tax profit of RM36.93 million in FY2024.
On September 10, WTK announced the completion of the disposal of two loss-making logging subsidiaries — Piramid Intan Sdn Bhd and Immense Fleet Sdn Bhd — for a total of RM40.35 million in cash.
Immense Fleet, whose assets included 61,749 hectares of planted forests in Sibu and Kapit alongside oil palm cultivation, suffered a significant after-tax loss of RM30.38 million in FY2024.
Piramid Intan, the main contractor for the Sarawak Timber Industry Development Corporation (STIDC) to log merchantable timber in Kapit, incurred an after-tax loss of RM1.12 million in FY2024.
WTK said the disposals of the loss-making timber subsidiaries were part of its strategy to exit non-core timber operations, streamline resources, and focus on long-term growth areas such as plantations and frozen food. The group has recently invested in a new cold room and expanded the retail network of its frozen food business. The group’s other core business is the manufacturing and sale of adhesive and gummed tapes in Penang.
When asked about the renewed investor interest in WTK, a local remisier attributed it to the shift in focus of the group’s business from non-performing timber to oil palm and frozen food, which are expected to drive the group’s earnings growth going forward.
He said another positive factor is that WTK’s shares are currently trading at a steep discount to its net asset per share of about RM1.50. Additionally, WTK is cash-rich, with cash and bank balances of RM262.85 million as at December 31, 2024.
