KUALA LUMPUR (April 22): Shares of SKP Resources Bhd rose in early trade today after PublicInvest Research initiated coverage on the stock with an “Outperform” rating and target price of RM1.07 and said the company was debt-free, had double-digit Return on Equity and Return on Asset, healthy cash conversion cycles and until recently, a tidy sum in its war chest.

At 9.15am, SKP rose 2.82% or 2.5 sen to 91 sen with 1.52 million shares done.

In a note today, the research house said these were all impressive characteristics for any company, and one which has registered recent 4-year revenue and  net profit CAGRs of 10.5% and 12.5% (up to FY 03/15) respectively.

“Add to that the 3-year net profit CAGR  (FY 03/14 – FY 03/17) of 45.7% with capital expenditure and expansions financed by internally-generated funds and  only recently, share issuances, it all makes for an astutely-run company, all the more impressive a manufacturing concern.

“We initiate coverage on SKP Resources with an Outperform call and a PE-derived target price of RM1.07.

“The Group is  primed for another growth spurt in the coming few financial years, underpinned by the expected increase in orders from its  key existing clients,” it said.