This article first appeared in The Edge Financial Daily on April 20, 2017

K-Star Sports Ltd (-ve)

SHARES in K-Star Sports Ltd (fundamental: 0.35/3, valuation: 0.9/3) rose one sen or 11.11% to 10 sen, with 7.86 million shares traded, valuing the group at RM29.3 million.

The last time K-Star was featured as a “Stock with Momentum” was on Sept 2 last year. Year to date, its share price has doubled from five sen on Dec 30.

In the fourth quarter ended Dec 31, 2016, the sports footwear and apparel maker’s net loss expanded 26% to RM35.98 million or 13.51 sen per share, from RM28.54 million or 10.71 sen per share a year ago.

K-Star said this was mainly due to provision of sales rebates to distributors. Quarterly revenue fell 4% year-on-year to RM52.67 million, from RM54.82 million.

For the full year, K-Star’s net loss for the financial year 2016 (FY16) grew 20% to RM59.47 million, from RM49.67 million in FY15, though revenue was flat at RM194.63 million, versus RM194.67 million previously.

It also anticipated limited upside to sales growth, given expectations of more intense competition, but remained optimistic about long-term sustainability, given its efforts and investment in brand recognition and product innovation.