Meta Bright eyes industrial equipment leasing diversification for earnings boost

KUALA LUMPUR (June 1): Towards widening its earnings base, Meta Bright Group Bhd (formerly known as Eastland Equity Bhd) plans to expand the group’s leasing and financing business segment to include the provision of industrial machinery and equipment leasing.

In a bourse filing on Thursday (June 1), the diversified group said its current leasing and financing segment comprises provision of short- to medium-term personal and business loans, but added that the diversification into industrial equipment leasing is expected to contribute at least 25% of its net profit and result in diversion of at least 25% of net assets in the long-term.

Meta Bright’s key segments include hospitality, investment properties, property development, leasing & financing and most recently, energy-related business — renewable energy and energy efficiency solutions.

In comparison to the group's largest revenue contributor, the hospitality segment, which contributed RM22.64 million or 75.66% of total revenue amounting to RM25.2 million for the nine-month period ended March 31, 2023 (9MFY2023). The existing leasing and financing segment contributed RM150,000.

By leveraging on its existing experience in the money lending business, Meta Bright executive director Derek Phang Kim Liew said the group sees the move as a “de-risked move” that will expand the scope of its profitable leasing and financing segment.

“We feel strongly about this diversification strategy and regard it to be value accretive. In line with relevant listing requirements, our shareholders can vote on this matter at the forthcoming extraordinary general meeting,” Phang added.

Moreover, Meta Bright said its experience and business relationships in the heavy machinery end-user businesses will afford it a head-start in business development for this diversification effort.

According to the group, the proposed diversification into industrial equipment leasing is to entail a financial commitment of RM5.2 million — RM4.5 million for capital expenditure and another RM700,000 for working capital — to be funded via cash, bank balances or internally generated funds.

As at end-March 2023, Meta Bright’s cash and bank balances stood at RM46 million, while current borrowings stood at RM7.39 million and non-current borrowings at RM20.24 million.

Meta Bright said it has secured two leasing agreements with Serantau Emas Sdn Bhd and Australia-based Mt Cuthbert Resources Pty Ltd with monthly rentals amounting to RM9,690 and A$43,053 (RM128,922) respectively.

However, Meta Bright noted that in view of the group's executive director and major shareholder Datuk Lee Wai Mun also being a major shareholder of Mt Cuthbert, the group is to seek shareholder approval for the respective leasing agreement at a forthcoming EGM.

Lee holds a 50.92% indirect stake in Meta Bright via his vehicle Leading Ventures Sdn Bhd. Malacca Securities Sdn Bhd has been appointed as the adviser for the proposed diversification.

Shares in Meta Bright closed half a sen or 2.94% higher at 17.5 sen, giving the company a market capitalisation of RM408.98 million.