Stock With Momentum: Benalec Holdings

This article first appeared in The Edge Financial Daily, on February 21, 2019.
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Benalec Holdings Bhd (-ve)
Trading of shares in Benalec Holdings Bhd (fundamental: 0.95/3, valuation: 0.9/3) triggered our proprietary momentum algorithm yesterday for the first time in over two years.

The stock rose in line with other construction stocks, and finished two sen, or 10.26% higher, at 21.5 sen, valuing the company at RM182.55 million. A total of 5.85 million shares crossed, compared with its 200-day average trading volume of 448,058 shares.

Benalec has been loss-making for two consecutive quarters. For its latest quarter ended Sept 30, 2018, the company turned in a net loss of RM2 million — compared to a net profit of RM858,000 — against a revenue of RM23.87 million, which has more than halved from RM10.23 million a year ago.

It said it incurred development costs of some RM414.4 million on reclamation works undertaken by its subsidiaries for projects in Tanjung Piai and Pengerang, both in Johor. The nature of the state government project is such that any revenue or profit can only be recognised upon successful disposal and/or leasing of the said land to third parties.