Stock With Momentum: Dufu technology Corp.

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This article first appeared in The Edge Financial Daily, on January 14, 2016.


Dufu technology Corp. Bhd (+ve)

Shares of Dufu (Fundamental: 1.7/3, Valuation: 2.4/3) rose as much as 29.4% or 15 sen yesterday to 66 sen in early trade, with over 40 million shares changing hands.

The sharp rise in price and trading volume prompted an unusual market activity query from Bursa Malaysia, which Dufu has yet to reply at the time of writing.

Dufu settled at a one-year high of 63 sen at market close.

The company manufactures industrial products and trades high quality computer disk-drive related components. In 2014, Dufu derived 75% of its sales from export.

For 9M2015, revenue grew 32.1% y-y to RM122.7 million, while net profit was 11.1% higher at RM7.8 million. Excluding a one-off gain on disposal of subsidiary in 9M2014, net profit would have expanded 10.3 times.

Going forward, Dufu expects its new product mix development with its hard disk drive (HDD) customers to sustain its HDD businesses and mitigate, to a certain extent, the expected contraction in the global HDD industry.