KESM Industries up 6% after strong 4Q results

by **Cals** Wed 23 Sep 2015, 20:44

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[size=28]KESM Industries up 6% after strong 4Q results

By Ahmad Naqib Idris / theedgemarkets.com | September 23, 2015 : 12:15 PM MYT

KUALA LUMPUR (Sept 23): KESM Industries Bhd ([You must be registered and logged in to see this image.] Valuation: 2.00, Fundamental: 2.50)'s share price continue marching higher to an intra-day high of RM4.32, jumping as much as 6% in the early morning trade, after the announcement of a big jump in its earnings for the fourth quarter ended July 31, 2015 (4QFY15), due to foreign exchange gains despite flat revenue.

At 11.42am, KESM rose 16 sen or 3.9% to one-month high of RM4.23; but the trading volume was thin, with only 306,900 shares exchanging hands. In the early morning trade, the counter gained as much as 25 sen or 6.1% to reach a high of RM4.32, placing among top gainers on Bursa Malaysia.

The impressive quarterly earnings numbers have lent support to the rebound on its share price from the recent low of RM3.47 late last month. Year-to-date, the stock has gained 74.6%, outperforming the KLCI's 8.49% decline.

KESM announced yesterday (Sept 22) that its net profit jumped 56% to RM10.45 million or 24.3 sen per share, from RM6.68 million or 15.5 sen per share a year earlier. This was despite flat revenue at RM68.94 million, compared with RM68.65 million in the previous year.

The company has declared a dividend per share of three sen, to be approved at its forthcoming annual general meeting.

KESM attributed the jump in its profit for the quarter to higher foreign currency translation income of RM3.11 million, as the US dollar strengthened, compared to a loss of RM7,000 a year earlier.

For the full-year period, net profit rose 57% to RM17.03 million, from RM10.88 million; while revenue rose 3% to RM263.12 million, from RM254.37 million.

The group indicated that semiconductor testing will continue to be the main growth driver for KESM, aiming to expand its testing devices for the automotive market.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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