Integrated Rubber Corporation Bhd (-ve)

RUBBER glove manufacturer IRCB (Fundamental: 2.1/3, Valuation: 0/3) rose 1.7% to close at a one-year high of 89 sen yesterday on heavy volume. It is likely a beneficiary of the stronger USD as export accounts for about 90% of its sales. 

Last Tuesday, IRCB announced its 1QFYJan2016 earnings results. Revenue rose 44.8% y-o-y to RM52.6 million while net profit surged over 14-folds to RM4 million, thanks to higher productivity and operational efficiency.

The PN17 company was loss-making in FY2011-FY2014, but returned to the black with a net profit of RM4.3 million in FY2015. 

IRCB turned into a net cash position in FY2014 and completed its regularisation plan in November 2014. Moving forward, it will increase its production capacity and rationalise its product mix to produce more nitrile gloves.

The stock trades at a high trailing 12-month P/E of 47 times and 3.8 times book. No dividend was paid for the past five years.

This article first appeared in The Edge Financial Daily, on June 23, 2015.