Hot Stock PRK driven to 7-yr high by privatization talk, speculative mid-cap buy

by **Cals** Mon 22 Jul 2013, 14:23

Hot Stock PRK driven to 7-yr high by privatization talk, speculative mid-cap buy
Business & Markets 2013
Written by Ho Wah Foon of theedgemalaysia.com
Monday, 22 July 2013 13:08

KUALA LUMPUR (July 22): Market talk that PERAK CORPORATION BHD [] (PRK) could be privatized and that it is possibly one of the good mid-cap stocks favoured by funds drove up its share price in morning trades.

At 12.30 pm noon break, PRK rose 22 sen or 8.7% to RM2.76 per share, after hitting a high of RM2.81 earlier, on trades of some 1.4 million shares.

The stock price of the third top gainer across the exchange was at a high of more than seven years.

“There is market talk that PRK will either be privatized or be taken over in a reverse takeover. That’s why the stock shot up today,” said a senior dealer.

The dealer noted that since May, the share price of PRK has been climbing steadily. Compared to RM1.45 in early May, the stock price has almost doubled.

Another dealer noted that PRK is also one of the good mid-cap companies which investment funds may be looking at in response to the latest policy move.

Prime Minister Datuk Seri Najib Razak recently made a call to government-linked investment funds to invest in mid-cap stocks that are well-managed.

As net asset per share of PRK is RM4.65 as of end-March 2013, investors see room for the stock to rise.

In the first quarter of this year, the company posted a net profit of RM6.8 million, up 46% year-on-year. This was gained on the back of a revenue of RM32.3 million, which was also higher by 46% year-on-year.

Last year, it registered a net profit of RM38.1 million on revenue of RM157.4 million.

The company operates mainly infrastructure and township development.

It is involved in the ownership and operation of Lumut Maritime Terminal that provides tuggage, pilotage, berthing, stevedorage, cargo handling, storage, and ancillary services; and operation of Lekir Bulk Terminal, a deep water seaport located in the Malacca Straits, Perak; and sale/rental of port related land.