CAP jumps 23% on proposed rubber recycling JV

-A +A

KUALA LUMPUR (Mar 19): China Automobile Parts Holdings Ltd (CAP) jumped as much as 23% after the company announced its proposed rubber recycling joint venture (JV) in China.

CAP (fundamental: 1.95; valuation: 1.8) climbed as much as six sen to 32 sen before paring gains. At 9:58am, the stock was traded at 30.5 sen with some 22 million shares transacted.

It was the fifth most-actively traded counter across the bourse.

Year-to-date, the stock had gained 1.96%, trailing the FBM KLCI's 3.62% gain.

Yesterday, CAP signed a memorandum of understanding (MOU) with Malaysia-based Sri Elastomers Sdn Bhd to record both companies' intention to establish the JV.

CAP told Bursa Malaysia the collaboration would involve a production facility in Xiamen, China to recycle used tyres and other processed rubber products.

Speaking at a press conference, CAP managing director Li Guo Qing said both companies would jointly invest US$3 million (RM11.07 million) in the recycling plant.

"We are not sure yet on the percentage of investment that each party has to cough up. We have to take into account the composition of debt and equity," Li said.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)