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This article first appeared in The Edge Financial Daily on May 31, 2018

Lee Swee Kiat Group Bhd (+ve)
SHARES in mattress manufacturer Lee Swee Kiat Group Bhd (fundamental: 2.1/3, valuation: 1.7/3) triggered our momentum algorithm yesterday for the 14th time this year.

The stock closed seven sen or 7.49% lower at 86 sen, bringing a market capitalisation of RM143.55 million. A total of 4.36 million shares were traded, almost five times its 200-day average volume of 931,028 shares.

The group’s net profit jumped almost five times to RM2.28 million in the first quarter ended March 31, 2018 (1QFY18), thanks to favourable market conditions. Quarterly revenue rose 60.8% to RM23.33 million in 1QFY18 from RM14.51 million in 1QFY17, on robust sales from both export and domestic markets.

For 2018, the group expects its new expansion and modernisation project for its latex division to increase capacity by 50% and stable latex prices to be conducive for production.

At the current share price, the group is trading at 3.07 times its book value.

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