This article first appeared in The Edge Financial Daily, on June 15, 2016.
Hwa Tai Industries Bhd (+ve)
Hwa Tai Industries Bhd (fundamental: 0.75/3, valuation: 0.3/3) again triggered our momentum algorithm yesterday, after doing so four times last month alone. The biscuit and confectionery manufacturer yesterday registered a trading volume of 2.15 million, which was nearly nine times its 200-day average of 155,989 shares.
After rising by 13.63% in a matter of a month in May, Hwa Tai announced on June 3 that canned food and beverage maker Rex Industry Bhd had become a substantial shareholder by buying 4.2 million shares or a 5.61% stake in the former in the open market.
For the first quarter of financial year 2016 (1QFY16), it continued with its streak of profitability — albeit at a meagre RM85,000 — thanks to bigger foreign-market sales and interest income. Its net gearing fell to 0.26 times from end-FY14’s 1.22 times after completing a three-for-two rights issue and par value-reduction exercise.
Hwa Tai’s closing price of 53.5 sen yesterday was equivalent to 1.54 times its price-to-book value.
SLP (7248) - Stock With Momentum: SLP Resources