Stock With Momentum: Chee Wah Corporation

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This article first appeared in The Edge Financial Daily, on December 29, 2015.


Chee Wah Corporation Bhd (-ve)

STATIONERY and printing materials manufacturer Chee Wah (Fundamental: 0.9/3, Valuation: 1.4/3) has jumped 59.8% to RM1.56 since announcing a stellar set of quarterly results on November 25. 

For 1QFYJun2016, revenue grew 24.7% y-y to RM21.5 million, boosted by higher export sales and the strengthening USD. As a result, it recorded a net profit of RM2.8 million as compared to a net loss of RM0.4 million a year ago. 

The Penang-based company is expected to continue to benefit from the weakening of ringgit as exports, primarily to other Asian countries, accounted for 71.3% of its revenue in FY2015.

Last Wednesday, managing director cum major shareholder Mr. Khor Say Beng ceased to be a substantial shareholder after disposing 14.8% equity interest in the company at RM1.18 via an off-the-market deal.

The stock trades at a trailing P/E of 10.1 times and 1.3 times book. Gearing stood at 54.7% as at end-September 2015.