JCY gains from ringgit weakness, outperforms KLCI

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KUALA LUMPUR (Jan 16): JCY International Bhd rose as much as 0.7% as the export-based company is deemed a beneficiary of a weaker ringgit versus the US dollar.

JCY (fundamental score: 1.8; valuation score: 1.2), which manufactures hard disk drive components, rose as much as 0.5 sen to 69 sen before erasing gains.

At 3.53pm, the stock was traded at 67.5 sen with some five million shares done. At current prices, JCY shares had strengthened by some 25% year to date (YTD).

The stock had outperformed the FBM KLCI, which had shed 1.06% YTD.

The Edge Research has picked JCY as a stock with momentum based on algorithm. In a report, Edge Research said JCY could benefit from further ringgit weakness.

At 3.54pm the ringgit was traded at 3.5633 against the US dollar. This compared to 3.1415 on August 28, 2014.

“With 78% of its (JCY) sales denominated in foreign currencies, further ringgit weakness may be positive for the company, as is already evident in its latest results,” Edge Research said.

JCY reported a net profit of RM120.09 million in financial year ended September 30, 2014 compared to a net loss of RM61.61 million a year earlier.

Revenue rose to RM1.87 billion from RM1.6 billion.

Edge Research's report is available in The Edge Financial Daily and theedgemarkets.com today.

(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.)