AWC Bhd
AWC provides integrated facilities management services including electrical distribution, lighting, and security as well as pneumatic waste conveying systems.

The company has three main divisions — Facilities, Environment and Engineering. The Facilities division mainly derives income from a facilities management concession with the Federal Government which provides a stable stream of income. It is also venturing into facilities management for hospitals.

The Environment division provides design, installation and commissioning services for projects in Malaysia, Singapore and the Middle East. The Engineering division provides building controls, heating and cooking systems for buildings.

AWC’s shares have consolidated at around the 20 – 30 sen level for about three years. The stock appears to attract periodic bouts of buying interest, surging from 26.5 sen to 34.5 sen, or 30.2% in just a month early this year. However, volume fizzled out from a high of 46 million shares to just 1 million shares barely half a month later, and price retraced back to the 27-sen level.

The same happened in July, with its share price and volume reaching as high as 37 sen and 18 million shares, respectively. The stock is currently seeing another rally, rising from 28 sen in mid-Oct to 34.5 sen yesterday.

AWC’s net profit declined from FY June10 to FY12, followed by a recovery in FY13-FY14. In FY14, net profit jumped 57.5% to RM7.2 million although revenue fell by 17.5% to RM119.6 million. Stripping out a gain on disposal of assets of RM1.23 million, net profit for the year was still higher at RM5.9 million.

At 34.5 sen, the stock is trading at just about its book value of 35 sen with a trailing 12-month P/E ratio of 10.8 times. Notably, the stock is backed by large net cash of RM 40.5 million, or a significant 52.1% of its market capitalisation of RM77.8 million.

This article first appeared in The Edge Financial Daily, on November 12, 2014.