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Cosmos Technology International Bhd has been rising recently. The counter moved above 50 sen level to close at 52 sen on Feb 13 with indications that near term upward momentum may persist. Towards the upside, near-term resistance level is seen at 58 sen, followed by 63 sen, according to technical analysts.

On a year-to-date basis, Cosmos has gained 32% already but still shy of its 52-week high of 64 sen about a year ago. Looking at the lower end, the counter has done well to rise from its year low of 35 sen. This is a smallish company in terms of market cap but trades at a high price earnings ratio of 37 times.

What is Cosmos involved in?

It operates two segments: water & wastewater industries, and oil & gas industry. The company distributes fluid control products, such as electronic flowmeters and related products, as well as dataloggers to its water customers. It also manufactures fabricated metal parts used in water, wastewater and oil and gas applications.

The water technology solutions provider made its debut with an IPO price of 35 sen on the ACE Market in October 2022.

For the second quarter ended Oct 31, 2023, Cosmos posted a higher net profit of RM781,000 versus RM52,000 a year ago. This was despite its revenue dropping to RM7.9 million from RM15.4 million a year earlier mainly due to the decrease in demand from the manufacturing segment.

Moving forward, Cosmos is positive on its growth driven by rising population and industrial demand in Malaysia. Also, the government and water companies have started embracing digital transformation of its water network operations to maximise its operational assets and data.

Furthermore, the Selangor government has recently announced its plan on water projects to ensure adequate and sustainable water supply in Selangor as well for the purpose of flood mitigation.

As such, Cosmos anticipates that there will be a growing demand of its water meters, data loggers, Lacroix’s Remote Terminal Units, as well as software that enhance digitalised water infrastructure to monitor water leakages, water billing, water treatment operating performance and water quality.

It will continue to participate in more tenders for water projects in Selangor as well as other states for the replacement of water meters, NRW and upgrading works.

In terms of operations, Cosmos has relocated to the new factory in the Balakong industrial area in December 2023. All these factors point to a better year for Cosmos and its share price will reflect accordingly.