Leon Fuat Bhd (+ve)
SHARES of Leon Fuat Bhd (fundamental: 0.6/3; valuation: 2/3) closed at its intra-day high of 49 sen, after gaining 5.38% or 2.5 sen yesterday. It saw heavy trading, with 15.49 million shares changing hands, a huge jump when compared with the stock’s 200-day average volume of only 602,899.5.
Leon Fuat is primarily involved in the trading and processing of carbon and stainless steel products, with facilities to undertake cutting, levelling, shearing, profiling, bending and finishing of products as well as production of expanded metal.
The group’s fourth quarter result for the three months ended Dec 31, 2015 (4QFY15) saw its net profit dropping by 49.15% to RM3.41 million from its 4QFY14’s net profit of RM6.71 million, even though its revenue saw a slight increase from RM124.41 million in 4QFY14 to RM127.24 million in 4QFY15.
The gain in revenue is mainly due the trading of flat carbon steel products while its net profit dropped mainly because of the lower average selling price causing a decrease in the gross profit margin.
For its full FY15, its net profit also dropped - by 32.92% to RM18.48 million from RM27.55 million a year ago - even though revenue for the full year was inched up 3.31% to RM505.4 million from RM489.2 million in FY14.
The group expects the Malaysian economy in 2016 to grow at a slower pace from 2015, with prices of commodities, including crude oil, to remain subdued. The prime mover of the its growth will be from domestic private consumption.
In a bourse filing, it said, “the board is cautiously optimistic that the Group’s performance and results, largely dependent on domestic consumption, will remain positive.”
Its share price is 8.88% higher compared to the end of last year and is trading at a trailing P/E of 8.22 times and is 0.61 times its book value.
LEONFB (5232) - Stock With Momentum: Leon Fuat
http://www.theedgemarkets.com/my/article/stock-momentum-leon-fuat
