Stock With Momentum: Kumpulan Powernet

This article first appeared in The Edge Financial Daily, on June 21, 2017.
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Kumpulan Powernet Bhd (-ve)

SHARES in Kumpulan Powernet Bhd (fundamental: 0.8/3, valuation: 0/3) triggered our algorithm yesterday for the fourth time this year. The counter closed flat at 76 sen, with 1.75 million shares traded, exceeding its 200-day average volume of 65,299.5 shares.

For the third financial quarter ended March 31, 2017 (3QFY17), Kumpulan Powernet’s net loss rose to RM1.13 million from RM741,000 a year ago on lower revenue and increased sales and marketing distribution costs, while revenue slipped to RM975,000 from RM1.11 million in 3QFY16. For the cumulative nine months ended March 31, 2017 (9MFY17), net loss grew to RM3.28 million from RM2.44 million in 9MFY16 on the back of RM2.61 million revenue versus RM3.49 million a year ago.

The group makes and supplies warp-knitted fabrics such as elastic, tricot, brushed tricot, meshed tricot and microfibre, and does commission dyeing and setting for customers that could generate higher profit.

At its current share price, Kumpulan Powernet is trading at 2.05 times its book value.