V.S. Industry Bhd (+ve)
VS (Fundamental: 1.1/3; Valuation: 1.8/3), an electronic manufacturing services provider, hit a 52-week high of RM3.99 before closing at RM3.98. Two possible catalysts come to mind — one, its associate company is diversifying into solar energy generation and two, it stands to benefit from the stronger US dollar.

Its Hong Kong listed associate, VS International Group Ltd signed an agreement to purchase 20% of Cadre Project Development for RMB44 million (RM25 million). The project is to develop a RMB220 million (RM126 million) 20MW solar power plant at Liangcheng county within China’s Inner Mongolia Autonomous Region.

In the latest 1QFYJuly15, sales increased 24.5% y-y while pre-tax profit jumped three-fold on the back of greater economies of scale. The company stands to benefit from a stronger greenback as export to US and China account for about 30% and 19% of sales, respectively.

The stock is trading at a trailing twelve month P/E of 9.8 times. Gearing stood at 43.8%.

This article first appeared in The Edge Financial Daily, on February 16, 2015.