Stock With Momentum: Chee Wah

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Chee Wah Corporation Bhd (-ve)
THE usually thinly traded shares of Penang-based Chee Wah (Fundamental: 0.6/3, Valuation: 1.5/3), a manufacturer and distributor of stationery products, rose 5.6% to 57 sen yesterday. Apart from its group finance director acquiring 30,000 shares over the past week, there have been no new corporate developments. 

Chee Wah markets its paper stationery products under the premium brand “CAMPAP” and derived 71.3% of its FYJune2015 sales from export markets. 

With stronger demand from these markets and the strengthening of the US dollar against the ringgit in FY2015, revenue jumped 7.2% YoY to RM95.3 million while net profit increased 21-fold to RM2.9 million. Net gearing decreased to 49.0% from 55.4%.

Notably, Chee Wah has recommended to pay its first dividend since FY2003. The proposed first and final dividend of 2.0 sen per share is subject to shareholder approval at the upcoming annual general meeting.

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This article first appeared in digitaledge Daily, on September 18, 2015.