Stock With Momentum: Ho Hup Construction Co Bhd

This article first appeared in The Edge Financial Daily, on July 23, 2018.
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Ho Hup Construction Co Bhd (-ve)
TRADING of shares in Ho Hup Construction Co Bhd (fundamental: 0.8/3, valuation: 1.5/3) triggered our momentum algorithm last Friday for the fourth time this year. The company saw 4.58 million shares traded, exceeding the counter’s 200-day average of 314,763.5.

The stock rose 1.5 sen or 2.94% to close at 52.5 sen, leaving it with a market capitalisation of RM196.8 million. Ho Hup was last traded at 0.58 times its book value.

Ho Hup’s net profit fell 30.28% for the first quarter ended March 31, 2018 to RM8.64 million from RM12.39 million, despite revenue jumping by 64.6% to RM58.49 million from RM35.54 million a year ago. The decrease in net profit was mainly due to the increase in finance costs with new additional short-term loans undertaken for the group’s working capital requirements. As a result, its earnings per share declined to 2.31 sen from 3.31 sen.

The construction and property development company announced on May 18 that it will unveil property projects worth RM1.7 billion for this financial year ending Dec 31, 2018 (FY18). With these projects in the pipeline, Ho Hup said the group is expecting a “better year” than FY17.