Solution Engineering Holdings Bhd (-ve)

SINCE Solution’s (Fundamental: 2.4/3, Valuation: 1.2/3) share price nosedived 62.8% last April, the stock has been on a steady upward trend, closing at 28 sen yesterday. 

The company specialises in designing and developing teaching equipment for engineering education. Its products are utilised in universities, polytechnics and colleges. It also distributes borosilicate glassware pilot plants and components.  Although Solution fell into the red with net loss of RM2.1 million in 2012, the company managed to return to black a year later with net profit of RM741,000 on revenue of RM12.7 million, thanks to increased sales of new products.  For 2014, revenue almost tripled to RM35.9 million, and net profit quintupled to RM3.8 million.

Notably, Solution’s wholly owned subsidiary signed a contract on June 1, 2014 to supply, install, test and commission a pilot plant training facility for RM17.9 million. The contract is for a period of 14 months ending 31 July 2015. 

The stock is trading at 1.89 times book with trailing 12-month P/E of 18.16 times.

This article first appeared in The Edge Financial Daily, on March 13, 2015.