REDTONE International Bhd’s share price has rallied by 222.86% year-to-date (YTD) to close at 57.5 sen last Friday.
The bullish investment sentiment for the digital economy in Malaysia and a substantial contract win has attracted investor interest into the Berjaya Corp Bhd and Johor Royal family-controlled company, which has gained RM288.48 million in market value YTD and is now valued at RM423.36 million.
Early this month, REDtone’s 56%-owned subsidiary, REDtone MEX Sdn Bhd, won a RM130 million contract to provide nationwide medical imaging, filmless radiology information system infrastructure and network connectivity to 20 of the largest hospitals in Sri Lanka, including the National Hospital in Colombo.
REDtone MEX’s technology partner for the contract is Hinacom Software and Technology Ltd.
REDtone MEX will set up a teleradiology command centre in a secured data centre with a telecommunications operator, enabling radiologists to remotely store, retrieve, view and analyse images. Training will be provided to medical personnel and technical teams across the country.
AmInvestment Bank Bhd analyst Joseph Chai, in a note recently stated, technically REDtone International’s stock price displays a bullish bias, but has a short-term target price of 52 sen and 55 sen.
Major downside support is anticipated at 45 sen whereby traders may exit on a breach to avoid the risk of a further correction, he said.
Kenanga Investment Bank Bhd analysts Nikki Thang and Koh Huat Soon stated in a recent note that chart-wise, REDtone has been on a steady uptrend since March this year, and its shares trading above all of its key simple moving averages.
“With room for further upticks on relative strength index and Stochastic indicators, we believe the share may be poised for more upside possibility,” they said.
In March, REDtone announced financial results for its third quarter ended April 30, 2019 (3QFY19), with its net profit rising more than eightfold to RM5.37 million from RM663,000 in the previous year, due to higher revenue from the managed telecommunication network services segment.
Earnings per share (EPS) for the quarter rose to 0.7 sen against 0.09 sen in 3QFY18.
Its quarterly revenue jumped 66.34% year-on-year to RM45.41 million.
For the financial period from May to June 2019, REDtone posted a RM6.48 million net profit and RM32.53 million revenue or 0.84 sen EPS.
There was no comparison numbers for the previous year’s corresponding period due to the change of financial year-end from April 30 to June 30.
For the financial year ended June 30, 2019, REDtone has declared an interim dividend of one sen to be paid on Oct 10, 2019.
Credit to: The Malaysian Reserve