Kanger International Bhd, a big player in producing bamboo products is close to forming a partnership with one of the top medical companies in China to manufacture COVID-19 vaccines.

Both the companies are expected to sign a partnership agreement soon to start producing the COVID-19 vaccines next year after getting all the necessary approvals and becoming a market leader.

Kanger, which is listed on the ACE Market of Bursa Malaysia Securities Bhd, has been trading actively recently.

The stock has risen steadily since early July and rose to a new high a month later to hit 30 sen. It was the most active stock today, rising as much as 20 per cent to touch 32 sen, before closing the day at 30.5 sen. A total of 383 million shares were traded.

Kanger is expected to make an announcement soon on its partnership with the Chinese firm to produce the COVID-19 vaccine and there is a high possibility for the stock to hit a limit up.

There is strong indication that the stock could touch RM1.00 this year and trade higher when the COVID-19 vaccine is produced next year. Take for example glove producer Careplus Group Bhd which had traded around 20 sen to 30 sen early this year and it rose to as high as RM5.85 in August outperforming its peers with the COVID-19 outbreak.

"Kanger is extremely undervalued especially when the potential for growth is there for the company. Kanger's venture into COVID-19 vaccines is expected to contribute positively to the future earnings of the group,” said a market observer.

Kanger has diversified into other sectors to reduce its dependency on bamboo products manufacturing.

The company reportedly said that it will invest about RM77 million to establish a glove manufacturing plant in Ijok, Selangor next year. Kanger will buy five acres in Ijok for RM6.8 million through its wholly-owned unit Kanger Glove Manufacturing Sdn Bhd.

Kanger Glove will then invest RM70 million to build the plant and install 8 production lines to produce medical, surgical and/or nitrile gloves.

The 8 production lines are expected to produce at least one billion pieces of gloves per annum.

Kanger told Bursa Malaysia in August that a substantial proportion of the total output of the production will be sold to Dubai-based Constellation Holdings Ltd (CHL), which is the appointed procurement agency for personal protective equipment, medical equipment and supplies for the Ministry of Health and Prevention of the United Arab Emirates, and countries in the Middle Eastern region. The rest of the output will be reserved to develop other market channels in Asia and Europe.

Apart from glove manufacturing and soon-to-be producing COVID-19 vaccines, Kanger had moved to property investment, and management. It has a project at the Ganzhou Economic and Technological Development Zone in Ganzhou city, China where it has finished building AutoCity and Kyriad Hotel.

The company is expected to get stronger in China as it expands further there and gets income from leasing the two buildings. Kanger had in March secured 10-year lease agreements for AutoCity, a purpose-built six-storey building with a net lettable area of 493,062 sq ft, and the 19-storey hotel with a build-up of 190,715 sq ft. The hotel has been leased to Ganzhou Fuying Kaili Hotel Management Co Ltd, the operator of Kyriad Marvelous Hotel – an international business hotel brand under the Louvre Hotel Group.

Kanger has said the initial rental income per year for the two buildings collectively is RM11.1 million and is subject to scheduled rent increases.

"The future is very bright for Kanger...this is a stock worth investing in if you are looking for long term gains," said the market observer.

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