Stock With Momentum: Engtex Group Bhd

This article first appeared in The Edge Financial Daily, on July 31, 2018.
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Engtex Group Bhd (+ve)
TRADING of shares in Engtex Group Bhd (fundamental: 0.8/3, valuation: 1.4/3) triggered our momentum algorithm yesterday for the first time this year. The company saw 5.94 million shares traded, exceeding the counter’s 200-day average of 1.04 million. The stock fell two sen or 1.77% to RM1.11, leaving it with a market capitalisation of RM483.66 million. Engtex Group was last traded at 0.7 times its book value.

RHB Research Institute reported on July 10 that pipe manufacturers were seen to gain from a better water industry outlook following the change in government.

RHB Research expects Engtex to clinch 60% (around RM120 million) of the total estimated contract value for Phases 3 and 4 of the water treatment plant project for financial year 2020 (FY20) until FY21.

It also viewed Engtex as a direct beneficiary of the construction of the Labohan Dagang water treatment plant, which is slated for completion by the end of this year.