Stocks With Momentum: Vsolar Group

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Vsolar Group Bhd (+ve)

Vsolar’s (Fundamental: 0.6/3, Valuation: 0/3) shares surged 7% yesterday, closing at a record high of 38 sen, following an announcement on Tuesday that it had entered into a collaboration agreement (CA) with Eastasia Group Co Ltd (Japan).

The CA allows Vsolar to utilize Eastasia’ engineering, procurement and construction solutions, for its own solar facilities and solar renewable energy business. Apart from the solar energy business, Vsolar is also involved in media publishing and distribution of software solutions.

Vsolar has been operating in the red since 2010. For FY2014, net loss was higher at RM3.5 million as compared to RM2.0 million in FY2013.

It currently has a 21-year concession with Tenaga Nasional, to sell 500kW of solar renewable energy.

In December 2014, Vsolar also proposed to undertake a rights-issue with warrants, raising gross proceeds up to RM115.3 million. RM107.7 million will be used within 36 months, for construction of solar photovoltaic plants.

The stock is trading at 6.1 times book-value.

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This article first appeared in The Edge Financial Daily, on April 23, 2015.