FARMBES (9776) ---Update.

Due to poor market sentiments the stock drifts down to the lower channel line before rebounding strongly.

The underline uptrend is very much intact.

And with the following GOOD NEWS...it should continues its uptrend with vigour...

THE NEWS.

SHH (Malaysia) Holdings Sdn Bhd has proposed a reverse takeover deal worth RM380 million to Farm’s Best Bhd, according to the Edge Financial Daily citing unnamed sources.

Under the proposed reverse takeover deal, SHH (Malaysia) Holdings, which operates a poultry business in Shandong, China, will form a new company to undertake the corporate exercise to inject its poultry business into Farm’s Best Bhd for RM380 million. In return, the new company will be issued 760 million new shares at 50 sen each.

At the end of the exercise, Farm’s Best Bhd will delist and the new company will resume its listing status, with the poultry business consolidating with the new company.

A source was also quoted as saying that “SHH China’s revenue and profit are almost five times the size of Farm’s Best”.

SHH Malaysia Holdings Sdn Bhd was incorporated in November 2013, and is owned by three Chinese nationals, Zhu Zong Ying, Zheng Wendi, and Xu Mao Lei, with stakes of 75%, 22%, and 3% respectively.

Also noted was that SHH Malaysia Holdings Sdn Bhd holds 100% equity interest in SHH Holdings Pte Ltd based in Singapore, which in turn holds a 100% stake in Shandong Hua Hui Food Ltd in China, which breeds parent chickens, incubates broilers, breeds meat chickens for in-house usage, and processes poultry chicken meat as its primary business activities.

On the 20th of January 2014, Farm’s Best Bhd had entered a Heads of Agreement with Zhu and Zheng, which would reduce the listed company’s par value to 50 sen from RM1, which will in turn reduce its share capital to RM30.54 million from its current RM61.08 million. However, this will merge the “technical, management, marketing and development resources to derive economies of scale” in their operations, as well as allowing Farm’s Best Bhd to “expand its customer base and have access to a greater People’s Republic of China market” through the SHH group.

Also noted was that the merger would propel Farm’s Best Bhd “into a global poultry player”, and will fully utilise Farm’s Best Bhd’s existing poultry processing plant which is currently under-utilised to export processed and further processed chicken products.

The listed company had recorded lower revenue and profit for its recently-ended first quarter for 2014, with revenue falling to RM114.45 million from 1Q13’s RM116.41 million, and profit fell to RM336 000 from 1Q13’s RM407 000.

Farm’s Best Bhd’s shares are currently valued at 63.5 sen, up 1.5 sen