Stock With Momentum: Rapid Synergy

This article first appeared in The Edge Financial Daily, on June 25, 2018.
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Rapid Synergy Bhd (+ve)

SHARES in precision tools maker Rapid Synergy Bhd (fundamental: 0.3/3, valuation: 0.6/3) triggered our proprietary momentum algorithm for the fourth time this year. The counter closed three sen or 0.52% higher at RM5.82, giving it a market capitalisation of RM516.77 million. A total of 875,300 shares changed hands, exceeding the counter’s 200-day average volume of 111,959 shares.

Rapid Synergy’s net profit fell by nearly half in the first quarter ended March 31, 2018 to RM452,000 from RM850,000 due to the lack of investment opportunities. This was despite revenue rising by nearly 50% to RM9.56 million from RM6.37 million. Its earnings per share dropped to 0.42 per sen from 0.94 per sen.

It said that its manufacturing division is expected to contribute positively to its earnings in line with the continuous effort to improve production efficiency. Meanwhile, Rapid Synergy’s investment holding division may face challenges due to unfavourable global and local economic conditions on top of the depreciating ringgit.

Rapid Synergy shares were last traded at 4.4 times its book value.