This article first appeared in The Edge Financial Daily on April 21, 2017

Mlabs Systems Bhd (+ve)

SHARES in Mlabs Systems Bhd (fundamental: 2.25/3, valuation: 0/3) triggered our proprietary momentum algorithm yesterday.

Mlabs is involved in the research and design and marketing of its software product known as the multimedia conferencing system. The stock dropped 2.5 sen or 17.24% at 12 sen with a volume of 9.41 million shares traded, exceeding its 200-day average volume of 349,757.5 shares.

In the third quarter ended Dec 31, 2016, Mlabs posted a net profit of RM281,000 or 0.15 sen per share, from a net loss of RM262,000 or 0.14 sen share a year ago. Revenue jumped to RM699,000 against RM160,000.

For the nine months ended Dec 31, 2016, Mlabs’ net loss narrowed to RM26,000 or 0.01 sen per share from RM783,000 or 0.42 sen per share in the previous corresponding period, although revenue plunged nearly 50% to RM1.21 million, from RM2.4 million a year ago. At the current share price, Mlabs is trading at 2.26 times its book value.