KUALA LUMPUR (June 21): Superlon Holdings Bhd spiked to an all-time high of RM2.04 after charting a good performance in earnings for its financial year ended April 30, 2017 (FY17) and declaring a 1.5 sen dividend.

At the midday break today, its share price gained 11 sen or 5.73% to RM2.03, with 2.05 million shares done for a market capitalisation of RM320.8 million. In a year, the share price has grown 93.4%.

In a note today, MIDF Research raised its earnings forecast for Superlon's FY18 by 24% based on higher volume sold and better profit margin while expecting operating margin to improve due to rising economies of scale.

Its analyst Ng Bei Shan also increased Superlon's dividend per share forecast to six sen from 5.5 sen.

Ng maintained a "buy" call with a RM2.26 target price based on 13 times price-to-earnings of FY18 earnings per share (EPS).

"We have increased our FY18 EPS forecast to 17.35 sen from 14 sen previously. We continue to like Superlon for its high cash position, superior profitability and capacity expansion plans," Ng added.

Yesterday, Superlon said in a bourse filing that its FY17 net profit gained 42.3% to RM23.7 million from RM16.7 million a year ago, as revenue grew 17.5% to RM106.3 million from RM90.4 million in FY16.

Its EPS for FY17 came in at 29.87 sen compared to 20.98 sen in FY16, Superlon said, attributing the better performance to higher volume of sales and favourable exchange rate in its manufacturing division.

Meanwhile, profit for the fourth quarter ended April 30, 2017 (4QFY17) was up 72% at RM6.4 million from RM3.7 million last year, as revenue rose 37.9% to RM32.5 million versus RM23.6 million a year ago.

The company also proposed an annual dividend policy of 30%, which would take effect in FY18, subject to shareholders approval.

The 1.5 sen dividend for FY17 will be paid on July 28. The ex-date is on July 5 and the entitlement date falls on July 7.

Moving forward, Superlon plans to invest about US$4 million to expand its capacity by setting up a new factory in Vietnam and targets to commence production in FY19 to cater to rising demand.

"The new factory would enable Superlon to strengthen its presence and support its customers in Vietnam and neighbouring countries. Barring unforeseen circumstances and based on the present trend of demand, the group is expected to achieve satisfactory results for FY18," it said.