KUALA LUMPUR (Sept 2): The share price of LKL International Bhd, which specialises in making medical beds, staged a strong rebound after the announcement that its unit secured a glove supply contract from a China-based company.
The stock soared by as much as 30.4% today to an intra-day high of RM1.20 in the afternoon trading session after the news of it landing an RM78.49 million contract to sell nitrile gloves. It closed at RM1.13, up 22.2%, or 20 sen, giving it a market capitalisation of RM484.5 million.
Trading volume swelled to 110.3 million shares, making it the 18th most actively traded counter on Bursa Malaysia.
In a filing with Bursa, LKL said the glove supply contract is expected to positively contribute to its current financial year ending April 30,2021 (FY21).
However, the announcement did not reveal the company’s source of nitrile gloves considering LKL does not own any glove production facilities. Supplying of nitrile gloves appears to be a new venture given that its product catalogue listed on its website does not include rubber gloves currently.
According to its FY20 annual report, LKL’s subsidiaries are mainly involved in trading and provision of medical equipment, as well as hospital and laboratory furniture.
LKL Advance Metaltech, which clinched the glove supply contract, is involved in the provision of medical and healthcare beds, peripheral items and accessories.
For its FY20, LKL posted a net profit of RM4.35 million from a net loss of RM2.5 million previously. The group explained that it managed to turn a profit after reporting greater revenue, which was boosted by higher demand for its medical and healthcare beds, medical peripherals and accessories and medical devices.
Annual revenue ballooned nearly 48% to RM54.95 million from RM37.18 million posted in FY19.
The company’s share price had a roller coaster ride last month. It jumped to a record high of RM1.80 on Aug 6, soon after it tumbled to a low of 80 sen on Aug 17. Based on the closing price of RM1.13, LKL’s shares are trading at historical price-earnings ratio of 129 times of its earnings per share of 1.01 sen in FY20.