Hextar Industries Bhd appears to be continuing its good upward trend riding on the positive momentum. The counter has shown a rebound from its recent low of 39 sen on 19 Sep before closing at 45 sen on 30 Sept.

Hextar Industries net profit fell 78.1% year-on-year for the first quarter ended March 31, 2024 (1QFY2024), dragged by lower average selling prices (ASP) and higher raw material costs due to the weaker ringgit despite higher sales volume of fertilisers. Hextar Industries posted a net profit of RM4.47 million for the quarter under review compared to RM20.42 million a year earlier, on the back of a 11.77% lower revenue to RM237.71 million from RM269.43 million.

The sales volume for fertilisers, which had been affected by the monsoon season, is making a satisfactory recovery from the preceding quarter. However, the softening of fertiliser prices and geopolitical issues in the global market remains a major concern for the current year’s performance.

On quarter-on-quater basis, it returned to the black with a net profit froma net loss of RM12.83 million in 4QFY2023. This was mainly due to a one-off impairment of goodwill of RM14.4 million incurred in the immediate preceding quarter. Revenue rose 43.29% from RM165.89 million, thanks to higher delivery of fertilisers.

It is mainly involved in the manufacturing and formulation of bulk blend, mixture and compound fertilisers, trading of various fertilisers as well as providing crop management solutions. Meanwhile, the company expects its newly added engineering solutions and office supplies segment to contribute positively to its future growth.

This was following its subsidiary Hextar Mitai Sdn Bhd, which has secured another project worth US$2.55 million (RM11.96 million) from the United Nations Development Programme to construct decontamination equipment and systems.

In terms of Price/Book, Hextar Industries shares are presently trading at 3.75x based on its book value per share of 12 sen as of end-June 2024. There is also the catalyst of the company’s transfer of listing from the ACE Market to the Main Market on 28 June. The stock is expected to attract greater interests from a wider pool of investors.