Visdynamics, Lion Industries top Shariah-compliant stocks

According to Bloomberg data, these are the top 5 Shariah-compliant stocks in the past 12 months in terms of share price gains


Shariah-compliant securities on Bursa Malaysia are those that comply with Shariah principles in terms of its primary business and investment activities.

The Securities Commission Malaysia (SC) updates its list of Shariah-compliant securities approved by its Shariah Advisory Council (SAC) in May and November yearly.

The list is updated by reviewing the companies’ annual financial reports, responses to survey aimed at obtaining detailed company information, and through specific inquiries made to the respective company’s management.

The SC’s May 2017 updated list had 676 Shariah-compliant securities, or about 75%, of the total 901 listed securities on Bursa.

The new list includes 23 newly classified Shariah-compliant securities and excludes 13 from the previous list issued in November 2016.

The classification tends to narrow the number of securities for Shariah- based investors, such as for the finance sector where options to invest are confined to BIMB Holdings Bhd and Syarikat Takaful Malaysia Bhd, while conventional investors can look at all the major financial groups listed on the exchange.

Top 5 Gainers

According to Bloomberg data, the top five Shariah-compliant stocks in the past 12 months in terms of share price gains are Visdynamics Holdings Bhd, Lion Industries Corp Bhd, JHM Consolidation Bhd, Boon Koon Group Bhd and Pentamaster Corp Bhd.

Visdynamics’ share price has increased by 457% year-on-year (YoY) and Lion Industries by 310% as of last week.

Visdynamics — which makes equipment for the semiconductor assembly and test industry — has benefitted from the rise in demand for semiconductors and finished tech products.

A year ago, the stock was priced at 21 sen and has risen to close at RM1.09 last Friday.

Visdynamics posted a record net profit of RM4.3 million for the financial year 2016 (FY16) compared to a net loss of RM666,000 the previous year. Revenue for the year jumped 2.9 times YoY to RM27.47 million.

The stronger financial performance was driven by an increase in sales of machines.

Visdynamics posted losses in FY08, FY09, FY12, FY13 and FY15. The firm trades at 18 times trailing 12-month earnings per share the stock returned 214% so far this year.

Another Shariah-compliant, information technology-based counter that outperformed in the past 12 months is JHM Consolidation which recorded a 434.4% increase in share price YoY.

The Penang-based company, which produces microelectronics components, had surged from 63 sen on August 2016 to close at RM3.10 last Friday — but not before testing a high of RM5.58 in June.

JHM Consolidation’s financial performance has improved marked for the financial year ended Dec 31, 2016, with earnings tripled to RM20.33 million from RM6.45 million a year earlier. In mid-February, the company moved to produce electronic lightning modules for the aerospace and aircraft industries after it was awarded the AS9100 Quality Management System certification.

The certification would enable JHM Consolidation to diversify from the automotive lighting module into the global aerospace and aircraft supply chain.

JHM Consolidation management has indicated the ACE Market-listed company’s net profit to come in above RM20 million over the two years, thus qualifying it for a Main Market listing by FY18.

JHM Consolidation trades at 31.4 times trailing 12-month earnings per share and 32 times its estimates for the coming year.

Boon Koon’s share price increased some 350% YoY to 49 sen as of last Friday from 11 sen.

The stock’s share gains come on the heels of Datuk Chiau Beng Teik acquiring 12 million shares on the open market on July 12, giving him a 28.52% stake in the company and making him the largest shareholder.

When Datuk Goh Boon Koon — after whom the company is named — resigned as executive chairman, Chiau, who has been increasing his stake in the company over the year, was designated the non-executive chairman on May 26.

Based on filings with Bursa, Goh still has a deemed 17.8% stake in the company.

The manufacturer of rebuilt commercial vehicles has been in the red for the past five years.

The group has plans to diversify into the property development business by participating in a commercial development in Petaling Jaya, Selangor, with a gross development value of RM306 million.

Meanwhile, Pentamaster’s share price has surged to close at RM4.21 last Friday from RM1.05 a year ago — a total increase of 311.43%.

Pentamaster trades at 19.7 times trailing 12-month earnings per share and the stock returned 213% so far this year.

The group has three operating segments: Automated equipment (its biggest revenue and profit contributor), automated manufacturing solution and smart control solution system.

Pentamaster intends to list its automated solution business on the Main Board of the Hong Kong Stock Exchange.

In a filing to Bursa, the group said details of the proposed listing have yet to be determined.

Government measures to limit import of steel products has helped improve Lion Industries’ financial performance and share price rebound strongly in the past year.

It has three steel mills which produce billets to be rolled into rebar and wire rods, and a hot briquetted iron plant in Labuan.

Its property development segment is mainly supported by The Promenade, a project in Penang. The company is also involved in the trading and distribution of building materials, lubricants, petroleum and automotive products.

One year ago, the share was priced at 30 sen and closed at RM1.17 last Friday.

Lion Industries trades at 12 times its estimated earnings per share for the coming year and the stock is 20% below the Bloomberg consensus one-year target price.

It returned 191% so far this year and the stock rose 4.4% in the past month.