KUALA LUMPUR (Dec 1): Fintec Global Bhd (FGB) is probably one of the best performing companies, in terms of earnings, not only among the penny stocks but the big cap companies as well.
The company, whose share price closed at 10 sen yesterday, reported a 905% year-on-year surge in net profit for its second quarter of financial year 2021 (2QFY21) ended Sept 30, 2020 to RM720.5 million from RM71.7 million in the previous corresponding quarter.
The quarterly profit is certainly envious in the current tough economic conditions caused by the Covid-19 pandemic.
Putting things in perspective, Fintec's quarterly profit of RM720.5 million exceeded performances of the small cap rubber glove players as well as those of a majority of the companies listed on Bursa Malaysia.
For instance, Careplus Group Bhd posted a net profit of RM42.9 million and revenue of RM122.7 million, for its 3QFY20 ended Sept 30, 2020, while Comfort Gloves Bhd posted a net profit of RM42.8 million on the back of RM198 million in revenue for its 2QFY21 ended July 31, 2020. Rubberex Corp (M) Bhd posted RM39.5 million of net profit for its 3QFY20 ended Sept 30, 2020 with a revenue of RM109 million.
These are record breaking earnings among the glove makers.
These rubber glove manufacturers saw revenue growth in line with the surging demand for personal protective equipment amid the Covid-19 pandemic, which translated into improvements in their bottom lines.
Fintec's quarterly revenue also made a quantum leap to RM4.2 million for 2QFY21 from RM339,000 a year ago. However, the company's quarterly revenue appeared to be meagre compared to its net profit.
Given the relatively small revenue, how did Fintec generate the handsome profit?
Almost all of its business segments — green technology, oil and gas (O&G) and trading — posted pre-tax losses during the quarter, with the exception of its portfolio investment division, according to the company's filing with Bursa.
In the filing, Fintec said its portfolio investment division saw a RM625.9 million increase in pre-tax profit, due to the positive performance of its strategic investments in Malaysia, the sale of marketable securities as well as mark-to-market gain in its long-term marketable securities, without further elaboration.