SKP RESOURCES BHD (-ve)
SKP’S (Fundamental: 2.1/3, Valuation: 1.1/3) shares peaked at a day-high of RM1.03, before closing down 2.5% to 98.5 sen last Friday. A day earlier, the company’s chairman-cum-managing director Gan Kim Huat, disposed of 10 million shares or 0.93% stake in SKP via a direct deal.
On April 6, 2015, SKP completed the acquisition of the subsidiaries of Tecnic Group, which deal in similar business. The acquisition is aimed at diversifying its customer base to include MNCs such as Nestle and GlaxoSmithKline.
SKP manufactures plastic parts, precision mould, and sub-assembly of electronic and electrical (E&E) equipment. Its major client, Dyson, accounts for slightly more than half of its sales.
For 9MFYMar2015, net profit rose 40.7% to RM30.7 million on the back of a 39.7% increase in sales to RM422.2 million, mainly due to higher demand from the E&E sector.
The stock trades at a trailing 12-month P/E of 27.8 times and 4.6 times book.
This article first appeared in The Edge Financial Daily, on May 18, 2015.