Stock With Momentum: BHS Industries

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This article first appeared in The Edge Financial Daily, on December 30, 2015.

 

BHS Industries Bhd (-ve)

PAPER printing materials manufacturer BHS (Fundamental: 1.2/3, Valuation: 0/3) has jumped 51.5% to 51.5 sen in two months since bottoming out at 34 sen on October 29. The Selangor-based company derived over half of its revenue from overseas markets, primarily Nigeria, Mozambique and Kenya. 

For 1QFYJun2016, revenue plunged 52.6% y-y to RM6.3 million while net profit slumped 95.8% to RM0.2 million, mainly due to lower overseas sales. The company said its major overseas clients in Africa were affected by depressed crude oil prices and stronger USD.

BHS has recently completed its right issue with warrants, raising RM41.6 million. The proceeds will be used to fund the production of renewable paper pulp products using palm oil industry waste empty fruit bunches.

Notably, FELDA has been acquiring shares in the company. As of today, FELDA is the second largest shareholder with a stake of 11.3%, followed by Pelaburan MARA Bhd (10.6%).

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