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This article first appeared in The Edge Financial Daily on May 22, 2018

DPS Resources Bhd (+ve)

SHARES in DPS Resources Bhd (fundamental: 2.25/3, valuation: 0.9/3) triggered our proprietary momentum algorithm yesterday for the first time this year.

The stock closed 0.5 sen or 5.56% higher at 9.5 sen, bringing it a market capitalisation of RM52.8 million. A total of 4.15 million shares were traded, about five times its 200-day average volume of 742,130 shares.

For the third financial quarter ended Dec 31, 2017 (3QFY18), DPS slipped into the red, posting a net loss of RM753,00 compared to a net profit of RM310,000 a year ago, mainly due to a strengthening ringgit and weaker demand. Quarterly revenue fell 27.8% to RM9.46 million in 3QFY18 from RM13.1 million in 3QFY17.

DPS is of the view that future prospects for its furniture products are encouraging and the group will potentially benefit from the outlook for the global furniture industry. It will focus on developing affordable housing projects to drive its growth and the group’s profitability. DPS expects to remain profitable for FY18.

At the current share price, the group is trading at 0.5 times its book value.

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