Stock With Momentum: TH Heavy Engineering

This article first appeared in The Edge Financial Daily, on March 1, 2019.
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TH Heavy Engineering Bhd (+ve)

TRADING of shares in TH Heavy Engineering Bhd (fundamental: 0.20/3, valuation: 0.30/3) triggered our momentum algorithm for the first time this year. The counter closed unchanged at five sen with 26.28 million shares traded yesterday — slightly more than 10 times its 200-day average trading volume of 2.39 million shares

On Wednesday, the group posted a net profit of RM907,000 for the fourth quarter of financial year 2018 (4QFY18) ended Dec 31, 2018, compared to a net loss of RM33.37 million a year ago. Quarterly revenue ballooned by 518% to RM2.18 million from RM352,000 a year earlier.

The higher revenue was attributed to facility charges for an ongoing project as well as higher fabrication construction activities. The improved profit was due mainly to project and finance cost reversals following its scheme of arrangement with creditors, as well as lower receivables impairments, losses on property, plant and equipment, and a one-off impairment loss on the amount due from customers recorded in 2017.