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Scanwolf Corporation Bhd
Scanwolf’s stock price has been trending higher over the past year on the back of increased trading volume, closing at a 52-week high of 66 sen on Wednesday.

The company is principally involved in two operating divisions — manufacturing of PVC products and property development. The manufacturing division focuses on PVC products such as extrusions and fittings used mainly in the building and furniture industry. Its property segment involves the development of two projects in Perak, Kampar Putra and Taman Harmoni.

Over the last six months, Scanwolf has seen a reshuffling of its board, the ceasing of two substantial shareholders, as well as the entry of a new substantial shareholder (who later was appointed as MD) via private placement — Dato’ Ch’ng Kong San with a 10% stake.  

The company’s financial performance does not seem overly exciting, with annual turnover hovering between RM36 – RM44 million for the past five years. Though revenue has been fairly steady, the company fell into the red in FY2012 with a loss of RM928,000 which widened to RM2.2 million a year later.

For FY2014, Scanwolf managed to pare losses to RM1.5 million, thanks to improved revenue contribution from the property development division and improved margins from the manufacturing segment. However, the company remains in the red for 1HFY2014 with a net loss of RM1.4 million.

While the fundamentals and past financial performance of the company are not interesting, investors and shareholders would probably like to know the direction of the company with the recent shuffling in its boardroom and top management.  

The stock is currently trading at 1.39 times book. Gearing stood at 51.4% as at 30 September 2014. The Edge Markets rates this company a 0.55 out of 3.0 on fundamentals, and 0.6 out of 3.0 on valuation.

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This article first appeared in The Edge Financial Daily, on January 15, 2015.

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