Stock With Momentum: Aturmaju Resources

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This article first appeared in The Edge Financial Daily, on January 18, 2016.


Aturmaju Resources Bhd (+ve)

Aturmaju (Fundamental: 1.25/3, Valuation: 0.3/3) closed down 0.6% at 79 sen last Friday, with 7.6 million shares traded.

The shares of the Sabah-based timber product manufacturer have gained investor interest since Dec 31, 2015, with its share price surging a cumulative 31.7% in two weeks on active trade. Before January, the stock was hardly traded.

Aturmaju fell into the red with a net loss of RM1.3 million in 2008, and has been loss making ever since. Net loss amounted to RM10.8 million in 2014.

For 1H2015, the company managed to turn in a cumulative net profit of RM483,000 — on higher sales and margins as well as the absence of amortisation costs — before a net loss in 3Q2015 wiped out its earlier earnings.

Revenue grew 10.7% y-o-y to RM24.4 million for 9M2015. Meanwhile, Aturmaju’s net loss narrowed to RM170,000, from RM3.2 million a year ago.

Positively, Aturmaju has pared its borrowings, from a net gearing of 36.5% in 2011 to just 0.9% at end-September.