Stock With Momentum: Chemical Company of Malaysia

This article first appeared in The Edge Financial Daily, on July 25, 2017.
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Chemical Company of Malaysia Bhd (-ve)
SHARES in Chemical Company of Malaysia Bhd (CCM) (fundamental: 1.25/3, valuation: 1.8/3) triggered our momentum algorithm yesterday for the ninth time this year. The counter closed up four sen or 2.55% at RM1.61 yesterday, after 1.57 million shares were done, a significant jump from the average 276,295 shares seen in the past 200 days.

In its first quarter ended March 31, 2017 (1QFY17), CCM registered a net profit of RM8.23 million or 1.81 sen per share, compared to a net loss of RM250,000 or 0.06 sen per share in 1QFY16, on higher sales. Its quarterly revenue grew 40.07% to RM212.24 million, from RM151.53 million.

The improved sales were mainly due to higher sales in the pharmaceutical and chemical businesses. The higher profit from the chemical business was due to higher average selling prices of its chlor alkali products and higher volume sold during the quarter.

At the current share price, CCM is trading at 0.99 times its book value.