Singapore’s Big Winner for the Week: Novo Group Limited

Novo Group Limited (SGX: MR8) is a steel trading, distribution, processing and manufacturing company that covers the steel value chain. It specialises in supply chain management in the particular industry.

Just this week, the firm made public that it “expects to record an increase of loss for the six months ended 31 October 2014 as compared to that for 2013” and that the loss is largely due to lower selling price on the back of unfavourable market conditions. The results for the stated period above is expected to be announced on Monday, 15 December 2014.

Despite such negative news, shares at the steel outfit added 11.9% since last Friday to close at S$0.235 yesterday. This trounces the performance of the Straits Times Index (SGX: ^STI), which declined by 0.2% during the same time frame.

Exactly three months ago on 12 September 2014, the company announced its first quarter results (for the three months ended 31 July 2014). Quarterly revenue zoomed up around 95% year-on-year to US$62.6 million, mainly because of better performance from its trading segment.

But even though Novo Group’s top-line surged, its bottom-line went deeper into negative territory. The company’s loss widened from US$3.5 million a year ago to US$5.1 million.This was largely due to increased trial production manufacturing costs incurred from its Jiangsu tinplate manufacturing plant.

The firm, which is on the SGX Watch-List, is now trading at 0.9 times its historical book value.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.