This article first appeared in The Edge Financial Daily, on October 19, 2015.
DPS Resource Bhd (+ve)
DPS (Fundamental: 1.05/3, Valuation: 1.5/3) surged 21.1% to close at 11.5 sen last Friday, as volume jumped more than six-fold to 14.9 million shares.
DPS manufactures rubber wood furniture components and provides kiln drying services. In January, the company successfully raised RM32.38 million from rights issue with free warrants. Most of the proceeds were for repayment of bank borrowings as well as working capital. The company also diversified into property development, via joint ventures with DPS Realty Sdn Bhd, with projects in Negeri Sembilan and Melaka.
DPS has been loss-making from FYDec10-FYMar14. It returned to the black in FY15 with a small net profit of RM 382,635.
For 1QFY16, sales dropped 1.3% y-o-y to RM10.4 million while net profit more than doubled to RM 948,000, due mainly to the property development segment.
The stock trades at a trailing 12-month P/E of 60.4 times and 0.5 times book. No dividend was paid since August 2008.