Stock With Momentum: CCK Consolidated Holdings

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This article first appeared in The Edge Financial Daily, on January 21, 2016.


CCK Consolidated Holdings Bhd (+ve)

SARAWAK'S integrated poultry producer CCK (Fundamental: 1/3, Valuation: 0.8/3) has gained 39% to RM1.05 in less than two months since announcing its 3Q2015 results on Nov 27, 2015.

For 3Q2015, net profit surged 67% y-o-y to RM3.9 million on the back of a 10% growth in sales to RM135.7 million, driven by better economies of scale and expansion of new retail outlets which helped capture a larger market share.

Over the past four years, CCK has invested over RM90 million in its core businesses of retailing of cold storage products as well as integrated poultry farming and processing. However, return on assets dropped from 13.6% to 5.3% during the same period.

Moving forward, it plans to expand its retail network in both Malaysia and Indonesia. The stock trades at a trailing P/E of 14.4 times and 1.07 times book value. Dividends totalled 2 sen for 2014, giving a yield of 1.8%.