This article first appeared in The Edge Financial Daily, on March 16, 2016.

Palette Multimedia Bhd (+ve) 

SHARES of Palette (fundamental: 2.4/3; valuation: 0.3/3) closed 9.09% lower at 5 sen yesterday despite being heavily traded, with  25.02 million shares changing hands. In comparison, its 200-day average volume was 421, 304.5. The heavy trade was despite a lack of new announcements from the company except for its quarterly results, announced on Feb 25, 2016.

Palette is a solution provider of broadband, wireless and networking products and services.

The group had been making losses for several years since 2008, turning profitable only in 2015. For 4QFY15, its net profit was RM304,000 compared to a net loss of RM4.863 million in 4QFY14. For the FY15 as a whole, it registered a net profit of RM2.185 million as compared to a net loss of RM6.836 million in FY14.

Revenue for 4QFY15 jumped by 31.17% to RM1.068 million from RM796,000 in the previous corresponding period. For the full year financial year, revenue improved by more than double to RM2.309 million compared to RM1.117 million in FY14.

With regard to its prospects, the group has successfully completed testing for its new range of software defined network products and is awaiting its full live trial and initial purchase. according to its filing with Bursa Malaysia.

The group said that iMedic system is “Palette’s entry into the new arenas of online health care as well as IOT (Internet Of Things).”

Another innovative, Wifi SDCard product that provides personal cloud storage to supplement the limited storage of smartphones, will also be launched and expected to contribute to its revenue in Q2FY16.

Since the end of last year, the stock price has jumped by 25%. At current price, it is trading at a trailing P/E ratio of 7.31 times and is 1.44 times its book value.