RGB International Bhd (-ve)

RGB (Fundamental: 1.7/3, Valuation: 1.2/3) is mainly involved in sales, marketing and manufacturing and technical support services of electronic gaming machines.

Shares for RGB rose 15.2% yesterday, closing at a historical high of 19 sen.

The company derived the bulk of its demand from Malaysia, Philippines and Cambodia, which accounted for 65.6%, 15.4% and 5.4% of revenue, respectively, in 2013.

For 2014, net profit more than doubled to RM18.5 million, on the back of a 53.7% increase in revenue, mainly attributed to higher number of gaming machines sold.

Moving forward, RGB expects to sell 1,500 machines in 2015, similar to its 1450 machines sold in 2014.

On April 10, 2015, the company proposed to undertake a private placement. This will raise gross proceeds of up RM18.5 million, of which RM10.3 million and RM7.7 million, respectively, will be used for repayment of borrowings and purchase gaming machines for existing concessions.

This article first appeared in The Edge Financial Daily, on April 21, 2015.