Stock With Momentum: Denko Industrial Corporation


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SHARES for Denko (Fundamental: 0.35/3, Valuation: 0.9/3) shot up as much as 58.3% to 38 sen on high volume, after the company posted its 4QFYMar15 results last Friday. It share price closed 37.5% higher at 33 sen yesterday.

After making losses in the previous two quarters, Denko posted a net profit of RM2.8 million in 4Q15, owing to a 58% revenue growth in plastic parts sub segment. For FY2015, it returned to the black with a net profit of RM 3.1 million, reversing a net loss of RM 3.6 million in FY2014. 

The Johor Bahru-based company manufactures plastic injection moulding and high precision plastic parts. It also carries out trading in consumer goods. Over the past five years, Denko alternated between profit and loss. 

The stock is trading at 0.69 times book value but high trailing 12-month P/E of 200.6 times. No dividend was paid for the past five years.


This article first appeared in The Edge Financial Daily, on June 2, 2015.