Stock With Momentum: Ancom

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This article first appeared in The Edge Financial Daily, on January 20, 2016.


Ancom Bhd (+ve)

SHARES of chemical player Ancom (Fundamental: 0.55/3, Valuation: 0.9/3) gained 8.6% to 44 sen yesterday. A total of 2.3 million shares were traded — 12.9 times its average daily trading volume.

Ancom is the holding company of polymer and industrial chemical products maker Nylex Bhd and ACE Market-listed logistics player Ancom Logistics Bhd. The company also owns Redberry Sdn Bhd which operates Bernama TV, The Malay Mail and The Malaysian Reserve.

For FYMay15, revenue declined 17% y-o-y to RM1.6 billion while net profit slumped 77% to RM2.2 million, hit by weaker demand and lower selling prices for industrial chemicals following the fall in crude oil prices. For 1QFY16, Ancom slipped into the red with a net loss of RM0.7 million, mainly due to higher distribution and administrative costs.

As at end-August 2015, net gearing ratio stood at 53.5%. The stock currently trades at a trailing P/E of 95.1 times and 0.3 times book value.