Muar Ban Lee Group Bhd (+ve)

SHARES in Muar Ban Lee Group Bhd (fundamental: 2.4/3, valuation: 1.4/3) triggered our momentum algorithm yesterday for the fourth time since September this year.

The stock closed three sen or 2.22% higher at RM1.38, with two million shares done compared with its 200-day average trading volume of 237,605 shares.

Earlier this month, the palm oil machine manufacturer proposed to place up to 10% of its issued shares to independent third-party investor(s), to raise some RM10 million to repay its bank borrowings.

The expected debt pare down would result in estimated interest savings of approximately RM272,000 per annum, and reduce its gearing ratio to 0.09 times from 0.2 times.

Muar Ban Lee’s net profit in the six months ended June 30, 2017 (6MFY17) slid 2.49% year-on-year to RM5.33 million, dragged by lower crude palm kernel oil (CPKO) average selling prices despite higher production, coupled with higher operating costs.