DPS Resources Bhd
DPS is involved in manufacturing rubber wood furniture components as well as providing kiln drying services.

DPS’ share price has risen 45% since August on the back of rising volume — it closed at 14.5 sen on November 4. Nevertheless, the company’s underlying fundamentals remain weak.

The company has been in the red since 2010, though losses are narrowing — net loss for FYMar2014 totalled RM 333,966. Despite registering a profit in 1QFY15, there is yet concrete evidence of a turnaround. Investors should note that although the company was profitable for the first three quarters of FY14, losses in 4QFY14 wiped out all these profits and tipped the company back to being loss-making.

The stock is trading at 0.5 times its book value of 31 sen, with an annualised P/E ratio of 23.3 times based on its 1QFY15 profit. The company has a market capitalisation of only RM38 million.

This article first appeared in The Edge Financial Daily, on November 6, 2014.