Leader Steel Holdings Bhd (+ve)

SHARES in Leader Steel Holdings Bhd (fundamental: 0.45/3, valuation: 0.9/3), which is engaged in trading and processing of minerals such as iron ore, manganese, mill scales and slags, triggered our proprietary momentum algorithm yesterday for the first time this month.

The company, which manufactures a range of steel products including steel bars, pipes and tubes, closed six sen or 10.62% higher at 62.5 sen with a volume of 9.09 million shares, exceeding the counter’s 200-day average volume of 628,024 shares.

In the first financial quarter ended March 31, 2017 (1QFY17), Leader Steel’s net profit jumped by nearly 209% to RM3.04 million from RM984,000 a year earlier due to higher profit margin as a result of higher selling prices in both the manufacturing and mineral trading segments. Revenue grew by 56.6% to RM57.96 million in 1QFY17 from RM37 million a year ago mainly due to higher revenue from the manufacturing segment, which recorded an increase of RM12.26 million or 40.61% from RM30.19 million to RM42.45 million.

At the current share price, Leader Steel is trading at 0.6 times its book value.