Hot Stock UPA surges 19% to 5-year high on firm 3Q earnings

by **Cals** Tue 24 Nov 2015, 20:17

Hot Stock

[size=28]UPA surges 19% to 5-year high on firm 3Q earnings

By Tan Siew Mung / theedgemarkets.com | November 24, 2015 : 12:38 PM MYT

KUALA LUMPUR (Nov 24): UPA Corporation Bhd ([You must be registered and logged in to see this image.] Valuation: 2.60, Fundamental: 2.50) saw its share price surge as much as 19% to a 5-year high of RM2.20, after its net profit rose 76.43% to RM5.7 million in the third quarter ended Sept 30, 2015 (3QFY15), from RM3.23 million in 3QFY14.

The stock was among the top three gainers in early trades today. It opened 9 sen or 5% higher at RM1.94 and climbed as much as 35 sen or 18.92% to RM2.20, before cutting down some of its gains.

At 12 pm, the stock was 26 sen or 14.05% higher at RM2.11. It saw 190,800 shares traded, bringing its market capitalisation to RM143 million.

According to a remisier, the rally was mainly due to the positive news from the company’s results.

In a filing with Bursa Malaysia yesterday (Nov 23), the company announced that its revenue for 3QFY15 increased by 20.28% to RM45.24 million, from RM37.61 million a year ago.

For the cumulative 9 months ended Sept 30, 2015 (9MFY15), its net profit also jumped 41.77% to RM12.47 million, from RM8.8 million in 9MFY14. Meanwhile, revenue for 9MFY15 went up 25.21% to RM130 million, from RM104 million in the previous year.

The company said the weakening of the ringgit had favoured its export segment and contributed positively to its bottom line.

“The board expects the performance of the fourth quarter to be positive,” it said.

However, it acknowledged that the persistent global financial turmoil might affect the group in FY2016.

UPA is mainly involved in the manufacture of diaries, other paper-related products and packaging material in rigid films. It is also the sole agent for Komori, the leading brand of printing machines in Japan.

According to Asia Analytica’s report dated June 1, the company’s earnings have held fairly steady, that in turn helped UPA build cash and maintain consistent dividend payments.

“Its share price too has been in a broad uptrend over the past 3 years — rising at a CAGR of 17.5%,” it said.

The company had declared a 8 sen per share dividend for 2014.

(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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