This article first appeared in The Edge Financial Daily on August 5, 2019

Kuchai Development Bhd (-ve)

TRADING of shares in Kuchai Development Bhd (fundamental: 1.2/3, valuation: 1.8/3) triggered our momentum algorithm last Friday for the first time since February last year.

The counter closed up five sen or 2.58% at RM1.99 last Friday, with 475,900 shares traded, exceeding its 200-day average volume of 34,699 shares.

In its third quarter ended March 31, 2019, Kuchai Development’s net profit fell 42% to RM476,000 from RM821,000 a year ago, due to lower share of profit of associate and lower foreign exchange gain. Revenue, however, inched up 3.56% to RM320,000 from RM309,000.

For the cumulative nine months ended March 31, 2019, the company fell into the red with a net loss of RM1.47 million, compared to a net profit of RM5.25 million a year ago, despite revenue being largely flat at RM1.92 million versus RM1.94 million previously.

The cumulative loss-making period was largely because its share of associate’s results was a loss of RM1.53 million versus a gain of RM4.57 million a year ago.