This article first appeared in The Edge Financial Daily on December 7, 2017

SWS Capital Bhd  (+ve)
SHARES in SWS Capital Bhd (fundamental: 0.8/3, valuation: 0.5/3) have triggered our momentum algorithm yesterday for the second time this week.

The counter closed one sen or 0.76% higher at RM1.33 yesterday, with a market capitalisation of RM192.56 million, after 796,700 shares were traded, some 6.7 times higher than its 200-day average volume of 118,627 shares.

SWS Capital is principally involved in the manufacturing and sale of office and kitchen furniture, plywood, small hardware and related products, and lamination operations. It also manufactures settees, sofas, air staples and nails, as well as invests in properties.

In its fourth financial quarter ended Aug 31, 2017 (4QFY17), SWS Capital returned to the black with a net profit of RM6.81 million compared to a net loss of RM5.19 million in 4QFY16, as it recognised a negative goodwill on its acquisition of Ee-Lian Enterprise (M) Sdn Bhd. Ee-Lian’s acquisition, for RM36.14 million, was completed in July.

SWS Capital’s quarterly revenue, however, slipped 5.9% year-on-year to RM31.96 million from RM33.98 million, as contribution from its leather upholstery sofa division fell.

For the full FY17, the group almost doubled its net profit to RM8.56 million from RM4.41 million a year ago. Revenue, however, slipped 2.8% to RM144.86 million from RM149.10 million.

As at market close yesterday, its shares were trading at 1.94 times its net book value.