Low beta stock: Kingfa Science gains its mojo back!
The voracious rally in the stock in 2021 has pushed the stock up by 89 per cent already.
There is a saying that goes - ‘There are decades when nothing happens and then there are weeks where decades happen’. If we apply this saying in equity markets, it can be true for several stocks. For years, the stock price does not move at all and then within few weeks, a decadal performance is delivered.
Usually, for that to happen, there has to be a trigger. If we look at Kingfa Science & Technology (India) for example, the stock plunged more than 12 per cent in the past three years and has been an underperformer in bullish markets. However, in recent months, the stock is showing an uptick.
The voracious rally in the stock in 2021 has pushed the stock up by 89 per cent already. The stock is up by 137 per cent in one year. By last Friday’s closing session, the stock had gained as much as 10 per cent.
Investors are betting on improvement in the financials of the company even as the stock at the current market price is expensively priced at over 297 PE multiple.
If we go by the AGM notes of the company, we may find as to why the stock is gaining its mojo back:-
1. Kingfa Science (India) is expected to focus on engineered plastic products. The company also plans to launch composite particles (plastic wood) in India.
2. With the onset of the current COVID-19 pandemic, the company is producing facemasks, which comply with global specifications of EN149-2001, GB2626, IS: 9473-2002, and are approved under the categories of FFP1, FFP2, FFP3, KN95, BIS, etc.
3. Kingfa Science (India) may become the export hub for the company even as several tie-ups with German car manufacturers are in progress. The demand for electric vehicles is a big plus for Kingfa Science (India).
4. Chakan Plant in Pune facility is in an expansion phase and once completed, it may start contributing to increased sales as manufacturing increases for key products in demand.
Kingfa Science & Technology (India) is a leading manufacturer & supplier of high-quality reinforced polypropylene compounds, thermoplastics elastomers, fibre reinforced composites and all engineering plastics.