Stock With Momentum: Zelan

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This article first appeared in The Edge Financial Daily, on March 31, 2017.

 

Zelan Bhd (-ve)

Shares in Zelan Bhd (fundamental: 0.95/3, valuation: 0/3) closed up one sen at 17.5 sen a share yesterday.

The counter saw 39.96 million shares traded compared with a 200-day average trading volume of 1.85 million shares.

However, the company was red-flagged by our proprietary algorithm, suggesting investors should exercise extra caution when trading in its shares.

The group posted a wider net loss of RM38.33 million in the fourth quarter of financial year 2016 (FY16) as revenue shrank 44.2% to RM64.7 million on lower contribution from local projects in its engineering and construction business segment.

For the full FY16, the group fell into the red with a net loss of RM68.25 million compared to a net profit of RM30.49 million in the previous year. Revenue for the year almost halved to RM222.37 million, also due to lower contribution from the engineering and construction segment. The stock is currently trading at 1.06 times its net book value.