JCY rises 7% on dividend, improved 1Q earnings

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KUALA LUMPUR (Feb 16): JCY International Bhd rose as much as five sen or 6.9% to 77.5 sen after the hard disk drive component producer reported better earnings for its first quarter ended December 31, 2014 (1QFY15).

Investors also bought the stock to be entitled for its dividend. At 10.16am, JCY (fundamental: 1.8; valuation: 1.8) changed hands at 74 sen to be the tenth most actively traded counter across the local bourse.

Year-to-date, JCY had gained 37%, outperforming the KLCI's 2% advance.

Last Friday, JCY said it registered a 66% rise in net profit to RM50.19 million for 1QFY15
from RM30.25 million a year earlier, mainly due to favourable foreign currency exchange rates and higher sales volume.

Revenue climbed to RM487.9 million from RM476.81 million. JCY also proposed a tax-exempt first interim dividend of 1.25 sen per share.

A weaker ringgit against the US dollar bodes well for export-based JCY as its US dollar-denominated income will translate into higher revenue in ringgit.

The ringgit was traded at 3.5645 versus the US dollar at 10:58am today. This compared to 3.1415 in August 2014.

Last year, JCY shares were traded at 70.5 sen in August before falling to 46.1 sen on December 16 as the group had to temporarily shut down its factory in Kulai Jaya, Johor following worker unrest and a fire outbreak.

(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.)