KUALA LUMPUR (Jan 15): Cocoa-based food manufacturer Pan Malaysian Corp Bhd saw active interests today that pushed its share price up 13.21% or 3.5 sen to an intra-day high of 30 sen this afternoon.

Despite having incurred losses in its third quarter ended Sept 30, 2014 (3QFY14), remisiers said investors could be attracted to Pan Malaysia Corp (fundamental score 0.6; valuation score: 1.2) for its strong net cash position, which could be used for investments into new business or acquisition of new ones.
 
The group is 27.53%-owned by Malayan United Industries Bhd (fundamental: 1.35; valuation: 0.3), and was the second most active entity across the bourse at 3.10pm, on a trading volume of 43.85 million.

According to a dealer, many penny stocks are staging a rebound this week and Pan Malaysia Corp has emerged a favourite due to its strong balance sheet.

Additionally, he said there might be some big players trying to push up the stock, given Pan Malaysia's huge issued share base of 708.397 million.

At a glance, Pan Malaysia Corp is still trading below its latest reported book value per share. With equity per share of 49.94 sen as at Sept 30, 2014, the stock was valued at 0.6 times as at its last traded price.

The Edge Research data also showed Pan Malaysia Corp’s cash and cash equivalents amounted to RM129.90 million. After netting off its total borrowings of RM326,000, Pan Malaysia has a net cash of RM129.11 million, or 18.23 sen per share. The cash alone is already worth more than half of its current share price.

However, Pan Malaysia Corp’s net profit of RM1.15 million for the nine months ended Sept 30, 2014 (9MFY14) was just 4.92% of the previous corresponding period’s profit of RM23.27 million.

The shrinking bottom line was mainly due to one-off gains from disposing of a piece of property in the previous year, the company had said previously.

Revenue,meanwhile, was 15.04% lower at RM47.91 million due to declining domestic sales, compared with 9MFY13’s sales of RM56.39 million.

Pan Malaysia Corp also made a net loss of RM642,000 on revenue of RM16.497 million in 3QFY14. It's previous corresponding period showed a net profit of RM22.84 million and revenue of RM18.91 million.

(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.)