Nextgreen Global Berhad: Insider Confidence Fuels Growth Potential

Kuala Lumpur, June 19, 2025 — Nextgreen Global Berhad (KLSE: NGGB), a pioneer in sustainable biomass conversion, has seen its shares gain momentum as key insiders deepen their stakes. The company's 36% insider ownership, anchored by CEO Thiam Lim and largest shareholder Dato' Gan Kong Hiok, signals a strategic alignment between management and shareholders. Dato' Gan's recent acquisitions, which increased his direct stake to 11.85%, underscore confidence in NGGB's ability to capitalize on its patented EFB (Empty Fruit Bunch) technology and ambitious growth plans. For investors, this insider activity presents a compelling entry point into a company poised for value appreciation.

Insider Ownership: A Catalyst for Long-Term Value

Insider ownership is a critical indicator of management's commitment to a company's success. At 36%, NGGB's insider stake far exceeds institutional holdings (19%), creating a governance structure where top executives and shareholders have significant skin in the game. This alignment reduces agency risks and ensures decisions prioritize long-term growth over short-term gains.

Dato' Gan's recent transactions exemplify this commitment:
- Between June 6 and June 10, he acquired 495,000 shares, lifting his direct stake to 11.85%.
- Subsequent purchases on June 18–20 added 530,000 shares, further consolidating his position.

These moves, made through open-market purchases, reflect a vote of confidence in NGGB's ability to execute its strategic roadmap. The 14.978% combined stake (including indirect holdings) positions Dato' Gan as a pivotal decision-maker, capable of influencing strategic initiatives like the RM600 million pulp plant.

Strategic Growth: From Patents to Profits

NGGB's core technology—converting EFB into pulp and by-products—has positioned it as a leader in Malaysia's palm oil waste-to-value ecosystem. Recent strategic moves amplify this advantage:
1. Joint Venture with IOI Corp and Xiamen C&D: A RM600 million pulp plant in Pahang, targeting 100,000 tonnes/year capacity by late 2025, will generate RM355 million annually in revenue once operational.
2. EFB Collection Expansion: Plans to build 20 collection centers in Malaysia (up from 4) and explore Indonesia's palm oil-rich regions aim to secure raw material supply chains.
3. Circular Economy Model: By utilizing 100% of EFB (pulp, fertilizer, animal feed), NGGB minimizes waste and maximizes revenue streams.

These initiatives, backed by insider capital, align with Malaysia's National Biomass Action Plan, which mandates sustainable EFB utilization. The company's focus on zero-waste production and partnerships with global firms like Xiamen C&D (a Fortune China 500 company) further de-risk its growth trajectory.

Financials: Revenue Growth Outpacing Profitability Challenges

NGGB's FY2023 results highlight a critical transition:
- Revenue nearly doubled to RM63.73 million (vs. RM32.93 million in FY2022), driven by EFB by-product sales.
- Net profit fell 29% to RM9.65 million, due to higher tax expenses and the absence of non-operating gains.

While profitability remains a short-term hurdle, the pulp plant's 2025 launch—projected to deliver 30% gross margins—is expected to stabilize earnings. By-product sales from fertilizer and animal feed will provide incremental cash flows, easing reliance on pulp alone.

Risks and Considerations

• Execution Risk: Delays in plant construction or off-take agreements could disrupt revenue projections.
• Market Volatility: Fluctuations in EFB prices (RM2–12/tonne) and global pulp demand pose headwinds.
• Regulatory Compliance: Ensuring adherence to environmental standards is critical for project approvals.

However, insider ownership mitigates these risks. Dato' Gan's financial commitment and operational experience provide a safety net, while the CEO's 11% stake ensures accountability.

Investment Thesis: Buy with a Long-Term Horizon

NGGB's RM900 million market cap appears undervalued relative to its growth potential. Key catalysts include:
1. Pulp Plant Launch: Expected to boost revenue to RM355 million/year by 2026.
2. Strategic Partnerships: Access to global markets via Xiamen C&D and Marubeni Corp.
3. Insider Buying Momentum: A signal of confidence in overcoming near-term challenges.

Recommendation: Investors with a 3–5 year horizon should consider accumulating NGGB shares at current levels. The stock's recent dip to 89.5 sen (a 15% discount to its April 2024 peak of RM1.05) presents an attractive entry point. Risks are mitigated by insider alignment and scalable technology.

Conclusion

Nextgreen Global Berhad's insider-owned structure and strategic initiatives position it as a beneficiary of Malaysia's green economy push. Dato' Gan's stake increase to 11.85% and the CEO's 11% ownership ensure management's interests are deeply aligned with shareholders. With a 36% insider stake and transformative projects on the horizon, NGGB is primed for value appreciation. For investors seeking exposure to sustainable biomass innovation, this is a strategic opportunity.

Note: Always conduct further due diligence and consult a financial advisor before making investment decisions.