AYS Ventures Bhd (-ve)

SHARES in AYS Ventures Bhd (fundamental: 0.8/3, valuation: 2.6/3) surged two sen or 6.25% to close at its three-month high of 34 sen yesterday, triggering our momentum algorithm for the first time.

Some two million shares were exchanged, versus its 200-day average volume of 59,036 shares. AYS Ventures is principally involved in the business of trading of steel products and building materials.

The company’s net profit for the first financial quarter ended June 30, 2016 jumped over three times to RM10.74 million, from RM3.04 million a year earlier, due to enhanced sales volume and lower cost of goods.

Revenue, however, fell marginally by 0.5% to RM144.81 million, from RM145.56 million, due to lower selling prices.

AYS Ventures expects global steel prices to remain volatile. But it expects the local construction sector to be steady, driven by heightened roll-outs of domestic infrastructure projects.

Having said that, it has implemented more stringent control on its procurement and inventory management to mitigate the impact of the volatile steel market.