Stock With Momentum: ULICORP

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This article first appeared in The Edge Financial Daily, on November 2, 2015.


United U-Li Corporation Bhd (-ve)

SHARES of ULICORP (Fundamental: 2.7/3, Valuation: 1.7/3) rose 1.4% to close at a one-year high of RM4.41 last Friday. Since the stock was first picked by our momentum algorithm in March, it has surged by 93%.

To recap, ULICORP manufactures and trades cable support and management systems, integrated ceiling systems, building materials and light fittings.

For 1H2015, revenue dropped 1.9% y-y to RM86.3 million while net profit fell 9.7% to RM9.3 million. The drop in margins was mainly due to higher administrative expenses.

ULICORP’s production capacity is expected to double once its two new plants in Nilai are completed by year-end. It has earmarked about RM22 million for the purchase of new machinery and equipment at the new plants. The funds were raised from a RM46.2 million private placement that has been completed on August 21. The placement involved the issuance of 13.2 million new shares at RM3.50 per share.