This article first appeared in The Edge Financial Daily, on November 6, 2015.

Wang-Zheng Bhd (-ve)

THE rarely-traded shares of Wang-Zheng (Fundamental: 2.1/3, Valuation: 2.6/3) triggered our momentum algorithm for the first time yesterday. Despite the absence of new material announcements, the stock rose 7.7% to close at a one-year high of 70 sen on a huge spike in trading volume.

Wang-Zheng manufactures and distributes processed paper and disposable products like diapers and sanitary protection. Its products are sold under its own brands, including Drypro, Dryplus, Carina and Carefeel. Wang-Zheng is also an original equipment manufacturer for various local and foreign brands. 

For 2Q2015, net profit jumped 380.5% y-y to RM6.6 million on the back of a 16% rise in revenue to RM65.2 million. The improvement in margins was primarily due to a foreign exchange gain from the capital returned by a foreign subsidiary. However, operating profit margin (excluding other operating income) slipped to 0.6% from 4% a year earlier.

Wang-Zheng has paid dividends consistently since 2005, with current net yield of 3.6%.