Stocks With Momentum: Mieco Chipboard

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Mieco Chipboard Bhd (+ve) Red Flag

Mieco Chipboard Bhd (Fundamental:0/3, Valuation: 1.2/3) rose as high as 61.5 sen yesterday, near its year high of 62 sen, with 2.55 million shares traded. The stock was “Red flagged” because of its low fundamental score, suggesting that investors should exercise extra caution. 

Mieco manufactures particleboards commonly used as a core material for home and office furniture, wall panels, worktops for both domestic and export markets. 

Revenue declined 4.4% from RM307.7 million in 2012 to RM294.7 million in 2013 on the back of lower particleboard selling prices. Losses widened from RM7 million to RM 63 million over the same period, due, in part, to impairment loss of RM45.8 million on Mieco’s Kuala Lipis plant. 

Positively, turnover improved 13.5% y-y in 9M2014 and Mieco returned to the black with net profit totalling RM3.4 million. Gearing stood at 46.3% at end-September 2014.

Mieco has not paid dividends since 2007.

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This article first appeared in The Edge Financial Daily, on February 26, 2015.