SDS Group Bhd had an amazing jump from a year low of 54 sen last year to a high of 86 sen recently. The counter may see additional strength in the near term with a bullish bias emerging above the 82 sen level. Towards the upside, near-term resistance level is seen at 90 sen, followed by 94 sen.

The super run recently could stem from expectations of the counter registering peaked profit numbers in the second quarter, capturing the Mid-Autumn festival sale. SDS traditionally see peak sales of moon cakes during the festival, boosting revenue and profit.

True enough, its revenue for the second quarter ended 30 September 2023 increased by 19% to RM84.85 million as compared with the immediate preceding financial quarter. Profit before taxation in 2QFY24 increased 84.8% to RM12.51 million as compared to RM6.77 million in the immediate preceding financial quarter.

The increase in revenue and profit before tax was mainly due to revenue generated from the sale of Mid-Autumn Festive products in current financial quarter. Not only that, it saw increase in sale of wholesale segment products through expansion of customer base and delivery fleet, as compared to the lower revenue recorded due to the fasting month in the preceding financial quarter.

It recently announced a significant jump in net profit to RM10.27 million in 3QFY24 from RM6.85 million a year ago on the back of higher revenue of RM85.75 million versus RM75 million. Moving forward, SDS aspires to enlarge its manufacturing capacity and plan to open 3 cafes annually.

SDS has built a solid base at the 60 sen level and has been attracted some buying interest. It is expected that the momentum and buying interest will strengthen and share price continue to swing upwards.