Hot Stock Profit-taking in Nexgram after doubling FY15 profit

by **Cals** Mon 04 Jan 2016, 23:31

Hot Stock
Profit-taking in Nexgram after doubling FY15 profit
By Kamarul Anwar / theedgemarkets.com | January 4, 2016 : 11:54 AM MYT

KUALA LUMPUR (Jan 4): Nexgram Holdings Bhd ([You must be registered and logged in to see this image.] Valuation: 1.10, Fundamental: 1.15)’s announcement last Thursday (Dec 31) of turning around in its latest quarterly profit, opened a window for investors to take profit today.
At 11:32 am, the security and surveillance equipment provider’s shares fell by half a sen or 5.26% to nine sen apiece, their lowest point as at late morning. Nexgram was the third most actively-traded counter on Bursa Malaysia as at writing, with 25.45 million shares traded.
Although half a sen might not seem much, SJ Securities senior remisier Goh Kay Chong said the spike in Nexgram’s stock last Thursday gave room for investors who were in the volume game of taking profit.
“Even with a small (profit) margin, investors can make profit from the stock, if they had bought the stock at a large volume,” he told theedgemarkets.com over telephone today.
Last Thursday, Nexgram’s share price closed one sen or 11.76% higher at its intraday high of 9.5 sen, with 36.13 million shares done. Investors who had come in at an earlier time, would have been in a position to make profit, given Nexgram’s counter had averaged at 8.8 sen in the month of December 2015.
The rise in share price came after Nexgram reported that its net profit for the first half of financial year ending April 30, 2016 (FY16) had jumped by 127.79% year-on-year (y-o-y) to RM3.39 million or 0.18 sen a share. This came after making higher sales of video surveillance equipment, which the company said commands better profit margin than its other products.
Revenue rose to RM57.78 million, from RM49.2 million, Nexgram’s filing with Bursa Malaysia showed.
Also, Nexgram turned around in 2QFY16 with a net profit of RM3.9 million, on revenue of RM31.01 million. In the previous year, the quarter saw a net loss of RM7,000, with sales worth RM24.98 million.
The firm, which also develops properties, said it hoped to focus on growing its existing local and global businesses, "in view of the uncertainties and challenges ahead."
(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.)