Stock With Momentum: Tek Seng Holdings

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This article first appeared in The Edge Financial Daily, on December 18, 2015.


Tek Seng Holdings Bhd (-ve)

PVC and solar products manufacturer Tek Seng (Fundamental 0.6/3, Valuation: 0.8/3) triggered our momentum algorithm yesterday, closing 4.9% to its all-time high of 96 sen. 

There appears no significant development recently save for earnings announcement on November 5. For 3Q2015, revenue surged 63.5% y-y to RM99.3 million while net profit jumped 183% to RM5 million, largely due to higher contribution from the solar division.

Penang-based Tek Seng is primarily involved in manufacturing and trading of polyvinyl chloride (PVC) and polypropylene (PP) non-woven related products. The company also has interest in manufacturing and trading of solar related products such as solar cells and solar panels. 

In 2014, the PVC division contributed 79.6% of total sales with the remainder coming from the solar division. Geographically, Tek Seng derived 54.6% of its 2014 sales from export markets. 

Moving forward, the company has earmarked RM23.1 million for capital expenditure.