Hot stock: Jubilee shares climb 11% after boosting stake in EG Industries, broker's call

SHARES in Jubilee Industries Holdings rose 11 per cent, or S$0.004 to S$0.041 apiece, as at 11.24am on Monday after the Catalist-listed company raised its stake in Malaysian-listed associate EG Industries and following a broker's recommendation.

Jubilee announced on Monday morning before market open that it had acquired about 3.5 million EG shares for RM1.95 million (S$658,000) from the open market, raising its stake in the firm from 11.72 per cent previously to 13.03 per cent.

EG's main business include printed circuit board assembly and box build, which entails high and low-mix printed circuit board and backplane assembly as well as design, manufacturing, testing and shipping of completed product to end users.

Jubilee provides electronics components, precision plastic injection moulding and mould design and fabrication services.

In a report dated March 9, CGS-CIMB initiated coverage on the stock with an "add" call and target price of S$0.051, saying the company is expected to swing back into the black with a full-year positive net profit after two years of net losses post-restructuring.

Jubilee posted a net profit of S$0.8 million for the first half of fiscal 2018 following four consecutive halves of losses since the acquisition of its electronic component distribution (ECD) business in Jan 2015, CIMB said.

Its ECD sales expanded 90 per cent to S$84.4 million and contributed approximately 96 per cent of total revenue in the first half. CIMB analyst Colin Tan expects Jubilee to ride the electronic component uptrend regionally.

Mr Tan cited Jubilee's intention to expand its moulding capacity five-fold by the end of fiscal 2019 and the turnaround its mechanical business, which had previously suffered four consecutive halves in the red, as factors behind its call.