“BUY” call on Permaju? Well, right now not many analysts are covering Permaju but it will soon be under the radar of some analysts and fund managers.
In fact a fund manager whom I met recently said he has been approached by some investors who are talking about the potential in Permaju Industries Bhd (Permaju). It seems they are looking for good value stocks to invest in and Permaju came up.
Permaju has made some very interesting developments lately but before I go into that, let’s talk about the company’s recent contract win.
The company, which is raising cash via a rights issue for expansion has won a RM1.2 billion construction contract from a reputable developer.
The contract is to build more than 7,000 units of apartments over six to seven years in the Seri Kembangan/Serdang area. This was reported by New Straits Times (NST), which also said the whole project will generate about RM2.4 billion in gross development value.
There was no mention of how many towers might there be in the development but the tallest structure is over 50 floors. Permaju will undertake the contract on a design and build structure.
While this isn’t enough to whet investor appetite, lets talk about the other developments within the company this past three months.
Permaju is involved in the trading of motor vehicles, timber plantation, construction, and property development and has been looking for new business to diversify its earnings.
On April 7, Permaju said it is looking into bottling and distributing Penaclo, a Hong Kong firm’s sanitiser product, for the Southeast Asian market amid the COVID-19 pandemic.
On April 28, Permaju inked a memorandum of understanding with a local firm to sell the company’s air purification products to its customers in the automotive sector, citing exponential demand growth for the product.
Last month it told Bursa Malaysia that it has incorporated a company named Permaju Glove Sdn Bhd (PGSB) to venture into the glove manufacturing business.
The intended principal activity of PGSB is to manufacture, distribute, buy, sell and generally deal in rubber goods for industrial and commercial purposes and other related goods, wares and merchandise of every nature and description, it said.
So why not invest in this counter which is seriously undervalued and has huge potential to expand. The stock is one of the cheapest and most undervalued stocks on Bursa if you look at their potential earnings and asset size.
Soon enough you will hear a local or foreign fund or investor looking at Permaju or has invested in the company. Buy when the stock is cheap and sell when you have gained more than 10 per cent or 30 per cent.
But if you think the stock will double or triple in price soon, then keep the stock as a long term investment.
