This article first appeared in The Edge Financial Daily, on December 31, 2015.

Kia Lim Bhd (-ve)

THE rarely traded shares of Kia Lim (Fundamental: 1/3, Valuation: 2.1/3) have surged near 40% to 74.5 sen since last Monday, despite the absence of new material announcements.

Interestingly, Kia Lim has 4.1 million outstanding warrants, which mature on February 5, 2016. The warrants have an exercise price of RM1.00 — a 34.2% premium to its current mother share price.

Based in Johor, Kia Lim is principally involved in the manufacture of clay bricks, under the ‘Clayon’ brand.

For 9M2015, revenue grew 10.8% y-y to RM53.4 million while net profit more than doubled to RM3.2 million, boosted by higher sales and selling prices.

Going forward, the company expects demand for clay bricks to moderate in tandem with the slowdown in the property sector.

The stock trades at a trailing 12-month P/E of 5 times and 0.56 times book. No dividend was paid for the past five years.