Stock With Momentum: DBE Gurney Resources

by **Cals** Mon 18 Apr 2016, 21:02

Stock With Momentum: DBE Gurney Resources

By Asia Analytica / The Edge Financial Daily | April 18, 2016 : 10:38 AM MYT

This article first appeared in The Edge Financial Daily, on April 18, 2016.

DBE Gurney Resources Bhd (+ve)
SHARES in DBE Gurney Resources Bhd (fundamental: 0/3; valuation: 0.9/3) were very active last Friday with 38.27 million shares changing hands, compared to its 200-day average volume of 1.91 million. Its share price jumped 10% to its three-month high of 5.5 sen before closing unchanged at five sen.
The stock has been “red-flagged” by the system due to its low fundamental score, suggesting that investors should exercise caution while trading in its shares.
Last Thursday, its subsidiary DBE Poultry Sdn Bhd (DBEP) entered into a strategic cooperation agreement with Pexden Holdings Sdn Bhd.
Under the agreement, Pexden will provide the technical know-how, machinery, production expertise, branding and related software and other advisory services as well as market the secondary processed value-added chicken products in Malaysia under the Harumi brand to DBEP.
DBEP shall utilise the services provided by Pexden to market and sell secondary processed value-added chicken products throughout Malaysia under the Harumi brand. In return, DBEP will pay Pexden a commission at the rate of 5% based on total monthly sales of raw materials supplied by DBEP after the goods and services tax.
The agreement helped formalise the business arrangement to carry out the business activities under the Harumi brand as announced on Feb 22, 2016 and DBE expects positive contribution from the operation, promotion and marketing of the chicken products.
In a press conference last Thursday, the group’s managing director Datuk Alex Ding Seng Huat said the group is expecting to turn itself around in the current financial year ending Dec 31, 2016 (FY16), helped by going to the downstream business of retailing fried chicken products in Malaysia after 10 years of losses.
Its FY15 results saw a net loss of RM10.75 million on revenue of RM119.55 million.
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