Stock With Momentum: Nylex

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This article first appeared in The Edge Financial Daily, on December 21, 2015.


Nylex (M) Bhd (-ve)

Nylex (Fundamental: 0.75/3, Valuation: 2/3) closed 2.6% higher at 59 sen last Friday, as volume tripled to 138,600 shares.

The company has been actively buying back its own shares for the past one year. It now has 1.9 million treasury shares, or 1.0% stake, up from 0.8% as of February 10.

Selangor-based Nylex manufactures and trades petrochemical and industrial chemical products (89.9% of FYMay2015 revenue) as well as polymer products. Export, mainly to Singapore, accounted for 51.2% of its FY2015 revenue. 

For 1QFY2016, revenue dropped 10% y-y to RM322.8 million while net profit slumped 41.5% to RM1.7 million. Both chemical and polymer segments recorded lower sales. The former was hit by lower selling prices due to lower oil prices while the latter was affected by lower contribution from its manufacturing plant in Surabaya, Indonesia. 

Dividend payments have been consistent, since FY2011. Dividend totaled 2 sen for FY2015, translating into a yield of 3.4%.