Stock With Momentum: Johore Tin

Stock With Momentum: Johore

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This article first appeared in The Edge Financial Daily, on October 5, 2015.

Johore Tin Bhd (+ve)

SHARES of Johore Tin (Fundamental: 1/3, Valuation: 2.4/3) rose 15 sen or 9.6% to close at RM1.71 last Friday, up 37.9% from a 1-year low of RM1.24 on August 25.

In 2014, Johore Tin derived 28.1% of its revenue from tin manufacturing and 71.9% from the F&B segment, which manufactures and sells milk and dairy products. The Johor-based company exports over 70% of its products.

For 1H2015, revenue jumped 70% y-o-y to RM204.4 million due to a 111% increase in F&B sales. Net profit surged 121.2% to RM10.7 million, driven by better sales margins and a low base from the F&B segment. However, tin manufacturing suffered a drop in profits due to the strong US dollar.

The company’s new milk and dairy products manufacturing plant in Teluk Panglima Garang, Selangor is slated for completion in 2015. It is expected to boost F&B production capacity by more than 25%.