KUALA LUMPUR: The share price rally of Theta Edge Bhd to its highest in over a decade last week may be due to several factors including the company's prospect of being involved in Malaysia's 5G rollout later this year, market observers said.
Lembaga Tabung Haji-controlled Theta Edge is vying to be a vendor for Swedish telco giant Ericsson which is in a 10-year partnership with Digital Nasional Bhd to deliver a nationwide 5G single wholesale network.
Theta Edge hit the limit up on Wednesday before settling the day 38 sen or 29.92 per cent higher.
On Thursday, the stock surged 39 sen or 23.64 per cent to RM2.04, its highest point in about 11 years, with 43.11 million shares traded.
Another factor could be the appointment of Nuraslina Zainal Abidin as Theta Edge's new group chief executive officer (CEO) recently, the observers said.
The appointment would drive its transformation and value creation, they added.
Nuraslina, 46, was CEO of Innovation Associates Consulting Sdn Bhd, a Dagang NeXchange Bhd (Dnex) subsidiary, and a founder and group managing director (MD) of Genexis Group Sdn Bhd
Nuraslina has delivered over US$150 million in value and savings to customers through her leadership in digital transformation and business optimisation.
She brings her 17 years of experience in the transformation and optimisation of business processes and performance of blue-chip companies, leading various technology mega projects and strategic initiatives for digital transformation.
Another factor was the influence of Arcadia Acres Sdn Bhd as a shareholder in Theta Edge, the observers said.
On April 1 this year, Tabung Haji entered into a strategic partnership with Arcadia to increase the value of its investment in Theta Edge, which is mainly involved in IT systems integration and telecommunication engineering services.
Arcadia has a track record in business turnaround, having turned loss-making Time Engineering Bhd into a profitable DNeX as well as Silterra (Malaysia) Sdn Bhd.
DNeX and Silterra (which was recently bought by DNeX) were both government-linked assets owned by Khazanah Nasional Bhd.
Theta Edge was the third asset that Arcadia planned to change its fortunes, the observers said.
Arcadia is owned by Zainal Abidin Abdul Jalil, a former group managing director of DNeX who is also a major shareholder of the IT and energy services provider.
Arcadia had in April bought a 30.3 per cent stake in Theta Edge, making it the second-largest shareholder of the company.
Despite selling 30.3 per cent, Tabung Haji remains the single largest shareholder of Theta Edge with a 38.4 per cent stake.
But there were rumours that Arcadia might be tempted to take over the company, the observers said.
The partnership is strengthening Theta Edge's financial performance as well as market position via new business collaboration, revenue enhancement and a stronger footing in the IT industry.
The commercialisation of digital transformation ideas had always been Arcadia's focus and Theta Edge was at the forefront in capitalising on the effort, they added.
"The current pandemic has accelerated the process of digitalisation and Theta Edge is well-positioned to capture this opportunity with the expertise of Arcadia," one of them said.
"Theta is growing into a top Bumiputera IT company in partnership with an entrepreneur like Arcadia while continuing its role as a financial investor to strengthen governance and sustainable business practices while at the same time promoting the development of successful Bumiputera entrepreneurs," he added.