This article first appeared in The Edge Financial Daily on December 6, 2017
SWS Capital Bhd (-ve)
SHARES in SWS Capital Bhd (fundamental: 0.8/3, valuation: 0.5/3), which triggered our stocks with momentum algorithm yesterday for the sixth time this year, closed 10 sen or 8.20% higher at RM1.32
It saw 898,000 shares traded, near eight times higher than its 200-day average volume of 114,732 shares. At the current price, it has a market capitalisation of RM192.56 million.
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 settes, sofas, air staples and nails as well as invests in properties.
SWS Capital deputy managing director Teoh Han Chuan was promoted to be the company’s managing director (MD) on Nov 16.
Teoh, 57, replaced Neo Chee Kiat, 47, who had been redesignated as a non-independent and non-executive director. Neo, the son of Neo Tiam Hock, who is also a major shareholder of the company, was appointed the MD of the company on Nov 30, 2003.
Teoh, meanwhile, is a co-founder and MD of Ee-Lian Enterprise (M) Sdn Bhd, which SWS Capital acquired in July this year for RM36.14 million, making Ee-Lian a wholly-owned unit.
He emerged as a substantial shareholder of SWS Capital after acquiring five million shares representing 3.428% of its total issued and paid-up share capital on July 20 in an off-market deal, which gave him a total stake of 6.855% in SWS Capital. On the same day, Neo sold off the same quantum of stake, leaving him with 2.995% .
SWS Capital said Teoh has over 25 years of experience in the household plastic wares industry.
In its third quarter ended Aug 31, 2017 (3QFY17), SWS Capital turned a profit of RM6.81 million versus a net loss of RM5.19 million — even as revenue slipped to RM31.96 million from RM33.98 million — as it recognised a negative goodwill on its acquisition for Ee-Lian. Revenue slipped as contribution from its leather upholstery sofa division fell.