Poh Kong Holdings Bhd appears to have a golden chance to achieve a bullish uptrend judging from its recent rebound. Over the past year, the counter rose 28.2% to close at RM1.09 on Aug 5.

It touched a year high of RM1.35 in May after the precious metal notched a fresh all-time high as investor demand soared across the broader metals market amid increasing optimism that the US will cut interest rates this year.

At that time, spot gold rose 1% to US$2,438.44 per ounce after hitting a record high of US$2,449.89 earlier in the session. There were signs of cooling inflation and traders now expect a 65% chance of a US rate cut by September.

The dollar index remained subdued, making greenback-priced bullion more attractive to buyers holding other currencies. A soft US dollar and expectations the Federal Reserve is expected to cut rates soon has helped gold prices.

Bullion is known as an inflation hedge, but higher rates increase the opportunity cost of holding non-yielding gold. But in the last few days, the jeweller declined as a result of the global market rout.

Poh Kong’s net profit surged 51.6% to RM47.6 million in the third quarter ended April 30, 2024 (3QFY24), from RM31.4 million a year ago, driven by higher revenue and uptrend in gold prices.

Earnings per share grew to 11.61 sen from 7.66 sen, according to the jeweller's bourse filing. No dividend was declared during the quarter under review.

Revenue rose 36.5% to RM519.6 million in 3QFY24 from RM380.7 million a year ago mainly due to increased demand for gold jewellery and gold investment products.

In 9MFY24, Poh Kong's net profit rose 30.4% year-on-year (y-o-y) to RM94.9 million from RM72.7 million. This was on the back of a 12.5% y-o-y higher revenue at RM1.3 billion from RM1.15 billion. Poh Kong's inventories expanded to RM863.07 million as of the end of April compared with RM755.15 million a year ago.

Poh Kong, moving forward, is poised to benefit from stronger and more dynamic trade activities, which are anticipated to translate into greater demand for gold and gold products.

It takes an optimistic outlook while cognisance of market corrections and global uncertainties.