LCTH Corporation Bhd (+ve)
Since LCTH (Fundamental: 2.5/3, Valuation: 1.1/3) was first picked by our algorithm on February 9, its share price has surged by 50.7% to 52 sen yesterday. This is partly due to its 4Q2014 earnings results. Net profit jumped over 12-folds y-o-y to RM6.0 million, despite sales increase of just 3.6% to RM30.9 million.
LCTH manufactures precision plastic components and fabricates precision mould and dies. Its clients include Hewlett Packard, IBM, Dyson Ltd and Bose Corp.
LTCH intends to spend up to RM65 million on capital expenditure this year. About RM30-40 million will be used to purchase land in Penang as its existing plant there is already operating at full capacity. It will utilise RM15-20 million to build another plant in Johor and RM3-5 million to replace old machineries.
Balance sheet is solid with net cash of RM98.6 million or 55.9% of its market capitalisation. However, no dividends were paid since May 2010.
This article first appeared in The Edge Financial Daily, on April 21, 2015.