Careplus Group Bhd
LISTED on ACE Market, Careplus Group is one of the country’s smaller glove manufacturers.

For 1H FY Dec 14, total revenue rose 3.3 % to RM72.6 million while net profit doubled from RM2.8 million to RM4.3 million. It is worth noting that net profit has been declining despite steady revenue growth over the past few financial years.

Careplus has a high net gearing ratio of 105% as at 30 June 2014. Much of the borrowings have gone into a major capacity expansion, with fixed assets rising from RM20.7 million to RM76.4 million between FY2011 and FY2013. No dividends were paid last year.

The stock is currently trading at 2.4 times book and a trailing 12-month P/E of 38.1 times.

Re-rating catalysts include boost in sales due to the Ebola epidemic and capacity expansion exercise, or better margins from the weakening ringgit and commodity prices.

This article first appeared in The Edge Financial Daily, on November 3, 2014.