This article first appeared in The Edge Financial Daily, on December 16, 2015.

Niche Capital Emas Hldg Bhd (-ve)

NICHE Capital (Fundamental: 0.75/3, Valuation: 0.3/3), which manufactures and sells gold jewellery and ornaments, closed 15.4% higher at 15 sen in active trade yesterday.

The company has nine retail outlets in China, deriving almost all of its sales from the country. Impacted by excessive competition in the China’s retail market and currency fluctuations, it has been making losses since 2012.

Last year, the company changed its financial year end from December to June.

For 1QFYJun2016, it posted a core pre-tax loss of RM1.6 million, after stripping off a RM5 million gain on reimbursement from a former subsidiary. The company attributed the losses to the economic slowdown in China which has affected the jewellery sector significantly. 

Throughout the year, Niche Capital has raised RM6.8 million via private placements, of which 86.1% was used to purchase inventory. Investors should note that both FYDec2013 and FYJun2015 accounts were qualified by external auditors.