Stock With Momentum: ES Ceramics

-A +A

This article first appeared in The Edge Financial Daily, on October 7, 2015.


ES Ceramics Technology Bhd (-ve)

CASH-RICH ES Ceramics (Fundamental: 2.55/3, Valuation: 0.8/3) rose 1.4% to close at 35 sen yesterday. Since it was first picked by our momentum algorithm on March 3, the stock has risen 32.1%. 

The Ipoh-based company is involved in manufacturing and distributing ceramic hand formers used in the glove manufacturing industry, which is seeing a major capacity expansion exercise. Its plants are located in Malaysia and Thailand.

For FYMay2015, revenue increased marginally by 1.1% to RM25 million. However, profits surged 113.3% to RM5.6 million due to improved operating performance and better product mix. 

The company has been paring down its debts since FY2009. It is currently in a net cash position of RM13.8 million or 6.7 sen per share, which is 19.4% of its market capitalisation of RM70.9 million.

The stock trades at a trailing P/E of 12.7 times and 2.2 times book. It has not paid any dividend since FY2008.