Success Transformer up 10.49% as CIMB Research starts coverage with buy call

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KUALA LUMPUR (April 19): Shares in Success Transformer Corp Bhd shot up to a six-month high of 89.5 sen in early trade today after CIMB Research initiated coverage on the stock with a favourable outlook for its lighting products.

Climbing 8.5 sen or 10.49% by 10.47am, the stock was the 10th largest gainer on Bursa Malaysia. 1.95 million shares were traded.

In a report today, CIMB Research analyst Walter Aw said Success Transformer stands to benefit from the government's plans to replace street lights nationwide with light-emitting diodes (LED) in stages beginning September 2019.

Success Transformer is involved in designing, manufacturing and trade of industrial lighting, electrical apparatus specialising in low-voltage transformers and process equipment.

"We like Success Transformer for net cash position of RM14.2 million as at end-Dec 2018 and current 48% discount to its net tangible assets of RM1.49 per share," he added.

CIMB Research has a target price of RM1.39, representing an upside of 55.3% to its current share price of 89.5 sen.