SOLUTION GROUP a.k.a SOLUTION ENGINEERING (0093) was listed in Bursa Malaysia 15 years ago in 2005. The company started its business from design and development of hardware and software solutions for engineering education and research in institutions of higher learning and skills training centres. Over the years, the company has gained a foothold in education field with its well-established brand name of SOLTEQ. I bet engineering students should have encountered laboratory experiment during their tertiary education and those laboratory equipments for experiment purposes were the main source of income for the company. The company underwent meteoric rise from 2014 to 2017 due to the increase in fund allocation by government to Technical and Vocational Training (TEVT) programmes especially during the Eleventh Malaysia Plan (“RMK11”). After its heyday, the group suffered sharp profit decline due to the overload equipment in public institution and change in government policy after the 2018 general election.
The above brief history was solely for the purpose of understanding the company’s background.
The company has caught my attention on 19th August 2020 due to the announcement of a memorandum of understanding (MOU) between the Solution and Cansino Biologics INC. The company has signed the MOU on 3rd August 2020 where Solution Group will be responsible for fill and finish of bulk COVID-19 vaccine supplied by CansinoBio in Malaysia. The group has also immediately incorporated a new wholly owned-subsidiary, Solution Biologics Sdn Bhd (SOLBIO) for this project.
On 23 September 2020, the company announced that SOLBIO had entered into a Registration, Manufacturing and Commercialisation Agreement with CanSino for collaboration in the manufacturing and commercialisation of the Vaccine.
On 30 October 2020, SOLBIO has received a letter of authorisation from CanSino which extended the scope of SOLBIO in the Collaboration and authorise SOLBIO to market and distribute the Vaccine in Philippines, Vietnam, Thailand, Myanmar, Cambodia, Laos and Brunei.
On 5th Nov 2020, the company has proposed diversification into pharmaceutical field awaiting approval from shareholder. At the sametime, the company also proposed private placement of 10% of current issued shares to raise about RM 18 million for the Covid-19 vaccine project. It is estimated RM10million will be used to set up of fill and finish facility, RM 5 million for purchase of machineries and equipment for fill and finish process, and RM 3 million to purchase quality assurance and control (“QA&QC”) equipment. Currently, the group SOLBIO will submit the formal application to National Pharmaceutical Regulatory Agency (NPRA) for the registration of the Vaccine upon the successful completion of the global Phase III clinical trial by CansinoBio.
*Tips: You might ask why is approval from shareholders needed for this? According to the ACE market listing rule, the proposal need approval from shareholders whenever there is diversion of more than 25% of net asset to be used in new business and the expected net profit from new business is more than 25% of the original business field.
Who is CansinoBio then? It is a listed company on both HK and Shanghai bourse at current market cap of 75 billion HKD. This year Cansino is in the limelight due to its development of Ad5-nCoV (Covid-19 vaccine). On 25th June 2020, China’s Central Militrary Commision approved the use of the vaccine by the military as a special needed drug. So far, the vaccine has good tolerability and safety and there were no serious adverse reaction among participants in clinical trials. Currently, there are 42 Covid-19 candidate vaccines in clinical trial with only 11 at Phase III clinical trial. CanSino is known as a front runner in the development of vaccine for COVID 19 vaccine and it is currently in the midst of completing the Phase III clinical trial for the Vaccine.
Lastly, the CanSino Ad5-nCoV vaccine is one of the candidates in the vaccine list of Malaysia Ministry of Health (MOH) and our Minister of Science, Technology, and Innovation Khairy Jamaluddin has asked the Finance ministry to set aside at least RM 3 billion for the vaccines based on the price of RM87.50 each for 70% of the population. From the latest announcement, Solution group is able to produce up to 6 million vials of vaccine per month upon completion of the aforementioned facility. With the range of price given and volume of vaccine that could be produced per month, smart investor should be able to gauge the range of future profit upon the completion of the global Phase III clinical trial. Can Solution ride the wave? If the answer is Yes, there is a Chinese saying that goes “Fish leaped over the dragon gate and become a dragon”. However, it all depends on the progress of the vaccine trial.
Stock: [SOLUTN]: SOLUTION GROUP BERHAD
2020-11-06 09:52 | Report Abuse
SOLUTION GROUP a.k.a SOLUTION ENGINEERING (0093) was listed in Bursa Malaysia 15 years ago in 2005. The company started its business from design and development of hardware and software solutions for engineering education and research in institutions of higher learning and skills training centres. Over the years, the company has gained a foothold in education field with its well-established brand name of SOLTEQ. I bet engineering students should have encountered laboratory experiment during their tertiary education and those laboratory equipments for experiment purposes were the main source of income for the company. The company underwent meteoric rise from 2014 to 2017 due to the increase in fund allocation by government to Technical and Vocational Training (TEVT) programmes especially during the Eleventh Malaysia Plan (“RMK11”). After its heyday, the group suffered sharp profit decline due to the overload equipment in public institution and change in government policy after the 2018 general election.
The above brief history was solely for the purpose of understanding the company’s background.
The company has caught my attention on 19th August 2020 due to the announcement of a memorandum of understanding (MOU) between the Solution and Cansino Biologics INC. The company has signed the MOU on 3rd August 2020 where Solution Group will be responsible for fill and finish of bulk COVID-19 vaccine supplied by CansinoBio in Malaysia. The group has also immediately incorporated a new wholly owned-subsidiary, Solution Biologics Sdn Bhd (SOLBIO) for this project.
On 23 September 2020, the company announced that SOLBIO had entered into a Registration, Manufacturing and Commercialisation Agreement with CanSino for collaboration in the manufacturing and commercialisation of the Vaccine.
On 30 October 2020, SOLBIO has received a letter of authorisation from CanSino which extended the scope of SOLBIO in the Collaboration and authorise SOLBIO to market and distribute the Vaccine in Philippines, Vietnam, Thailand, Myanmar, Cambodia, Laos and Brunei.
On 5th Nov 2020, the company has proposed diversification into pharmaceutical field awaiting approval from shareholder. At the sametime, the company also proposed private placement of 10% of current issued shares to raise about RM 18 million for the Covid-19 vaccine project. It is estimated RM10million will be used to set up of fill and finish facility, RM 5 million for purchase of machineries and equipment for fill and finish process, and RM 3 million to purchase quality assurance and control (“QA&QC”) equipment. Currently, the group SOLBIO will submit the formal application to National Pharmaceutical Regulatory Agency (NPRA) for the registration of the Vaccine upon the successful completion of the global Phase III clinical trial by CansinoBio.
*Tips: You might ask why is approval from shareholders needed for this? According to the ACE market listing rule, the proposal need approval from shareholders whenever there is diversion of more than 25% of net asset to be used in new business and the expected net profit from new business is more than 25% of the original business field.
Who is CansinoBio then?
It is a listed company on both HK and Shanghai bourse at current market cap of 75 billion HKD. This year Cansino is in the limelight due to its development of Ad5-nCoV (Covid-19 vaccine). On 25th June 2020, China’s Central Militrary Commision approved the use of the vaccine by the military as a special needed drug. So far, the vaccine has good tolerability and safety and there were no serious adverse reaction among participants in clinical trials. Currently, there are 42 Covid-19 candidate vaccines in clinical trial with only 11 at Phase III clinical trial. CanSino is known as a front runner in the development of vaccine for COVID 19 vaccine and it is currently in the midst of completing the Phase III clinical trial for the Vaccine.
Lastly, the CanSino Ad5-nCoV vaccine is one of the candidates in the vaccine list of Malaysia Ministry of Health (MOH) and our Minister of Science, Technology, and Innovation Khairy Jamaluddin has asked the Finance ministry to set aside at least RM 3 billion for the vaccines based on the price of RM87.50 each for 70% of the population. From the latest announcement, Solution group is able to produce up to 6 million vials of vaccine per month upon completion of the aforementioned facility. With the range of price given and volume of vaccine that could be produced per month, smart investor should be able to gauge the range of future profit upon the completion of the global Phase III clinical trial. Can Solution ride the wave? If the answer is
Yes, there is a Chinese saying that goes “Fish leaped over the dragon gate and become a dragon”. However, it all depends on the progress of the vaccine trial.
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