Denko Industrial Corp Bhd (-ve)
THE thinly-traded shares of Denko (Fundamental: 0.8/3, Valuation: 0.9/3) saw renewed trading interest last week, gaining 21.2% in just 4 days to close at 31.5 sen on Thursday.
Johor-based Denko operates in two segments: manufacturing of plastic injection moulding and high precision plastic parts as well as wholesaling of foodstuff and consumer goods. Over the past 5 years, it alternated between profit and loss.
Denko returned to the black in FYMar2015 with a net profit of RM 3.1 million, thanks to increased contribution from manufacturing, especially from the plastic parts sub segment. Gearing stood at 21% as at end-March, down from 46% a year ago.
The company is disposing an underutilised warehouse in Penang for RM7.7 million — which will be used to repay borrowings and for working capital purposes. Upon completion of the transaction, Denko will realise a disposal gain of RM5.4 million and reduce its accumulated losses to RM2.4 million.
This article first appeared in The Edge Financial Daily, on July 20, 2015.