Stock With Momentum: PMB Technology

This article first appeared in The Edge Financial Daily, on May 3, 2018.
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PMB Technology Bhd (+ve)

SHARES in PMB Technology Bhd (fundamental: 0.8/3, valuation: 0.5/3) have triggered our momentum algorithm for the first time since January this year. The stock closed four sen or 1.61% lower at RM2.44, after 483,400 shares were exchanged, about 3.5 times its 200-day average volume of 140,818 shares.

PMB saw a 28% fall in net profit in the fourth quarter ended Dec 31, 2017, to RM2.65 million from RM3.66 million in the same quarter in 2016, despite a 24% year-on-year revenue rise to RM145.67 million from RM117.1 million due to stronger contribution from the group’s construction and fabrication segment.

Pricier construction materials, the cost of which was not fully passed on to customers, weighed on the group’s net profit, besides higher taxation and finance costs. The group’s operating expenses grew 23% to RM139.91 million from RM113.8 million, while finance costs grew 61% to RM1.95 million from RM1.21 million and taxation jumped to RM1.58 million from

RM52,000.

For the full financial year 2017, PMB’s net profit slipped a marginal 3% to RM10.41 million from RM10.72 million, though revenue grew 34% to RM497.47 million from RM371.03 million.