Hot stock: SGX RegCo queries Nanofilm for unusual price movements after shares jump 10%

NANOFILM Technologies will resume trading on Thursday (Jul 11) following a halt called on Wednesday afternoon after the group received a query from the Singapore Exchange Regulation (SGX RegCo) for “unusual price movements” in its shares.

Responding to the query, Nanofilm flagged a recent press statement on its subsidiary’s partnership with a Chinese fuel cell company as a possible explanation for its trading.

The subsidiary, Sydrogen Energy, had entered into an exclusive collaborative partnership with Shanghai Hydrogen Propulsion Technology to develop a 250 kilowatt hydrogen fuel cell power module system for use in the shipping industry.

“The news could have triggered some investors to start to focus on the possible financial gains to Sydrogen arising from a commercialisation of the power module system,” Nanofilm said in its response to the SGX RegCo.

The group noted that the development of the power module is one of the fuel cell systems product development projects by Sydrogen that was recently announced during the group’s FY2023 results presentation.

It is also “one of the many” development projects the company and its subsidiaries undertake on an ongoing basis as part of the ordinary course of business.

Nanofilm said that Sydrogen has not received any orders for the power module to date. It added that there was no certainty that the product would be launched or commercialised.

It also does not expect the power module to have any material impact on Sydrogen’s financial performance for the current and next financial year.

Prior to the halt, the group’s counter neared a seven-month high, trading 10.1 per cent or S$0.085 higher at S$0.925 as at 1.24 pm, before the bourse regulator’s query at 1.37 pm. The last time Nanofilm’s shares closed near this level wason Dec 19, 2023.

Its shares were trading 8.3 per cent or S$0.07 higher at S$0.91 before the trading halt.

In its query, SGX asked Nanofilm to disclose if it was aware of any information, if known, that might explain the trading. It also asked if the company was aware of any other possible explanation for the trading and asked Nanofilm to confirm its compliance with listing rules.

In April this year, Nanofilm posted a 19 per cent rise in revenue to S$39 million for its first quarter ended Mar 31, 2024, from S$33 million in the corresponding year-earlier period.

The group, which specialises in advanced materials and coatings, attributed the revenue improvement to the recovery of its consumer business segment despite an “uncertain operating environment”.