Stock With Momentum: EG Industries

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This article first appeared in The Edge Financial Daily, on October 26, 2015.

 

EG Industries Bhd (+ve)

EG (Fundamental: 0.95/3, Valuation: 1.7/3), an electronic manufacturing services (EMS) provider, has surged 19.2% to 66.5 sen since going ‘ex-rights’ on October 8.

In September, EG announced a 3-for-2 renounceable rights issue to raise up to RM57.8 million to expand its manufacturing facilities and upgrade existing machinery. The rights shares will be issued at 50 sen per share and subscribing shareholders will receive 1 free warrant for every 2 rights shares.

In July 2014, Singapore-listed Jubilee Industries Holdings Ltd emerged as EG’s single largest shareholder with a 26% stake. Jubilee, which has since increased its stake to 32.38%, will pool resources with EG to enhance each other’s EMS capabilities and capacity.

For FYJun2015, net profit surged more than 12-fold to RM25.8 million, boosted by a higher margin sales mix and a fair value gain of RM15.5 million on disposal of financial assets.

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