Stock With Momentum: Chin Well Holdings

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


Chin Well Holdings Bhd (-ve)

Since Chin Well (Fundamental: 2.1/3, Valuation: 2.0/3) first triggered our momentum algorithm on November 19, the stock has risen as much as 9.6% to a high of RM1.71. Last Friday, the stock gave up some gains to close at RM1.63, despite reporting solid quarterly results.

For 1QFYJune2016, revenue increased by 10.3% y-y to RM140.6 million, boosted by stronger local demand with sales rising 120.2% to RM43.7 million. Net profit doubled y-y to RM18.2 million, attributed mainly to higher forex gain of RM4.7 million. 

Chin Well is one of the world’s largest manufacturers of carbon steel fasteners and wire products. Europe is its largest market, contributing 56% of sales. This is followed by Malaysia (22%), with the balance from Vietnam and other countries. 

The acquisition of the remaining 40% interest in Chin Well Fasteners (Vietnam) Co Ltd, last year, will contribute positively to its bottom-line.  The high-growth Vietnam operation serves the Do-It-Yourself fastener segment.