If you missed out on Asia Poly Holdings Bhd, there is another proxy in the market.

Asia Poly owns a 17.61% stake in Dolphin International Bhd.

The major shareholders of both companies are THE SAME.

Also, Dolphin is Uncle Don.

Yup, that casual dining restaurant chain where you can Dine like a Don . . .

But but but . . . wasn’t Dolphin a mismanaged palm oil milling company, that was loss making, and wracked with fraud issues?

The accumulated losses and wrongdoing saw Dolphin’s share price free fall from the 60 sen level to a basement level price of below 10 sen.

That certainly was the depressing situation  . . . until late 2019.

Quietly and out nowhere, Asia Poly emerged with a stake in Dolphin. Nobody bothered then, as nobody believed the milling business could be saved.

Asia Poly had other plans though, and no, it had nothing to do with palm oil. In early 2020,  Dolphin announced that it would be acquiring a Food & Beverage (F&B) business.

That F&B business was none other than Uncle Don.

For those living in the kampung, “Uncle Don” is a local casual dining full-service restaurant chain in Malaysia. Since commencing operations in 2016, the restaurant chain has expanded rapidly to 30 outlets to date.

Interestingly, many of the franchisees that take up Uncle Don franchise, end up taking up more than one location because of the business’ ability to give an efficient return on investment. A good number of the franchisees are also property developers.  

Perhaps Uncle Don’s success can be attributed to its affordable pricing for its delicious Asian and Western cuisines. Hey, a chicken chop set lunch is only RM15.60.

It was a common sight to see many Uncle Don outlets full, even during the MCO and CMCO period.

Dolphin acquires 3 Uncle Don outlets

Very quietly early last year, it was first made known that SOME Uncle Don outlets would be injected into Dolphin.

A filing to Bursa on Feb 27 revealed that Asia Poly was already a major shareholder of Dolphin at 11%, as well as the owner of three Uncle Don outlets via Asia Poly Food and Beverage Sdn Bhd,

In that announcement, Dolphin announced that it was acquiring 6 million shares in Asia Poly Food and Beverage Sdn Bhd from Uncle Don’s Holdings Sdn Bhd and Asia Poly Holdings Bhd for RM22mil.

This would be satisfied via the issuance of 131.58 million new Dolphin shares at an issue price of 7.6 sen each and RM12mil cash.

Dolphin was also diversifying to undertake the food and beverage related activities. 

To fund this acquisition, there was a rights issue comprising of 412.09 million new shares in Dolphin, together with up to 247.25 million free warrants B. The rights were priced at 6 sen per share.

There was also a placement of 131.58 million new shares priced at 7.6 sen to raise RM12mil in cash.

To cut a long story short, this exercise which was completed on Oct 1, saw three Uncle Don outlets being injected into Dolphin.

Asia Poly participated in the rights issue and increased its stake to 16.1% in Dolphin.

So it thus became official.

Dolphin became Uncle Don.

Another private placement and now a distribution centre

Just going through the Bursa announcements, it is obvious that Asia Poly has plans to expand and grow the F&B business beyond just being a chain restaurant.

First of all, barely 6 months into Asia Poly on Jan 5, acquired another 16 million shares in Dolphin, which saw its stake increase to 17.61% or 140.91 million shares. increasing its stake in Dolphin,

Then on Jan 26, Dolphin announced that it was undertaking another private placement exercise that would see up to 186.32 million new shares being issued to raise between RM9mil to RM13mil.

Among others, the proceeds would be used to buy more Uncle Don outlets, besides funding a distribution centre, United Distribution Sdn Bhd for RM1.35mil.

The setting up of this distribution centre was significant, as on Jan 5, 2021, it had accepted a letter of award from Uncle Don’s Manufacturing Sdn Bhd for the exclusive distributorship rights in relation to the distribution of Uncle Don’s brand of chili sauce and tomato sauce to retailers and restaurants.

Thus, United Distribution would now be selling the chilli and tomato sauces to ALL of its 30 Uncle Don outlets, besides selected retailers.

This would mean an additional source of income for Dolphin.

Not even four weeks later on Feb 17, and Dolphin announced that it had fixed the issue price for the placement shares at 7.19 sen.

This would indicate that the placement shares had been placed out and completed. The new shares should likely be listed in the coming days.

It will be interesting to see whether any interesting characters took up some of the placement.

More importantly for the business, what other expansion plans lie ahead for Dolphin. Will it acquire more outlets?

Or will it acquire other franchise restaurants or go regional?

What is for certain though, growth has likely only just begun.

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