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Falling Knife of the Week: CCM Group

The shareholders of CCM Group (SGX: 5QZ) saw their company shed 35% in price so far this week. The shares of the firm closed at $0.039 on Thursday. On Thursday itself, the company lost 20.4% of its market capitalisation.

CCM Group is involved in main building works and general building works for residential and commercial buildings in the public and private sectors in our sunny island. The company also provides leasing and installation of access equipment systems.

This week saw the company make a flurry of announcements to the Singapore Exchange.

On Monday, 6th January 2014, CCM Group made announcements of the names of the Directors and the Chief Executive Officer who had increased their stake in the company after a successful issuance of bonus warrants. A total of around 1.7 billion warrants were issued on a day after the New Year public holiday.

On Wednesday, 8th January 2014, it was announced that Ms Chan Pui Yee, Executive Director of the CCM Group and CCM Industrial Pte. Ltd., a wholly-owned subsidiary of the company, had resigned “in order to spend more time on family commitments”. According to the company’s website, Ms Chan was also the head of the Human Resources and Administration department.

On the same day, another resignation was announced. Mr Chan Tien Chih, the Executive Director of CCM Group, stepped down to focus on the operations of CCM Group’s construction business with CCM Industrial Pte. Ltd. and to facilitate the board’s rejuvenation and renewal process.

That is not all. Mr Wee Meng Seng Aloysius, Independent Director of CCM Group, also resigned on the same day “on his own accord due to work commitments and health issues”.

The company also announced that that intends to “acquire two shares, comprising 100% of the issued and paid-up share capital of Singapore Construction Pte. Ltd. (SCPL) in Singapore from Mr Chan Heng Fai for a nominal consideration of S$2.00”. Mr Chan Heng Fai who is a Non-Executive Director and a controlling shareholder of CCM Group is also the owner of SCPL. SCPL is also involved in the construction industry.

Furthermore, CCM Group also made public that it intends to incorporate a new subsidiary in Australia by the end of March this year. This will be done through its wholly-owned subsidiary, CCM Property Pte. Ltd (CCMP). This new subsidiary will be used to look for opportunities in property development in Western Australia, which will be part of the firm’s diversification from construction to real estate development.

Lastly, for 8th January 2013, the company issued a profit warning statement with regards to the unaudited financial results for the financial year ended 31st December 2013.

Yesterday, 9th January 2014, CCM Group released an announcement summarising what had happened for the past few days and also stated that CCMP is issuing S$5 million worth of three-year secured redeemable exchangeable notes to fund its foray into Australia.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.  Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.