Stock With Momentum: Cycle & Carriage Bintang

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This article first appeared in The Edge Financial Daily, on January 4, 2016.

 

Cycle & Carriage Bintang Bhd (-ve)

CCB (Fundamental: 2.1/3, Valuation: 1.1/3), the country’s largest Mercedes-Benz dealer, triggered our momentum algorithm last Thursday, rising 3.7% to RM3.38.

Primarily involved in the retailing and provision of after-sales services, CCB also has a 49% equity interest (Class B shares) in Mercedes-Benz Malaysia Sdn Bhd (MBM) , with the balance 51% (Class A shares) owned by Daimler AG. The joint venture is expected to contribute a dividend income of RM11.2 million every year. 

For 9M2015, net profit surged almost six-fold y-y to RM41.9 million on the back of a 86.2% growth in revenue to RM1.2 billion. 

The improved performance was mainly due to higher unit sales and favourable sales mix as well as the recognition of a dividend income received from MBM. With a net cash position of RM7.2 million, CCB has earmarked RM23.3 million for future capital expenditure.

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