Stock With Momentum: Merge Energy

This article first appeared in The Edge Financial Daily, on October 2, 2018.
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Merge Energy Bhd (-ve)

Trading of shares in Merge Energy Bhd (fundamental: 0.95/3, valuation: 0.9/3) triggered our momentum algorithm yesterday for the second time since last month, closing up six sen or 17.65% at 40 sen yesterday, with a market capitalisation of RM26.8 million. A total of 1.98 million shares were done, versus the counter’s 200-day average trading volume of 59,467 shares.

The company is principally involved in building, structural and civil engineering works, besides property development and property investment.

It narrowed its net loss in the first financial quarter ended June 30, 2018 to RM461,000 from RM1.4 million a year ago, as revenue jumped 49% to RM9.08 million from RM6.1 million, with contribution from its new project, Loji Rawatan Air Pagoh. It said the project’s progress is on schedule, and that its loss was mitigated by the project’s efficiency and strict administrative cost control.

As at yesterday, Merge Energy was trading at 0.53 times its book value.