The answer might lie in the company’s very brief and perhaps deliberately vague Aug 24 announcement after market hours that it is exploring an acquisition of a China-based company, although there is no assurance of anything definitive or binding for the moment. The company’s share price, which had already doubled earlier that day, doubled again by the end of the week.
On Aug 13, clean-room equipment provider Eindec Corporation reported that losses for the six months to June 30 doubled from a year earlier, on a 44% drop in revenue. The company notes that Covid-19 has disrupted construction projects, to which its business is closely tied, and therefore “adversely affected”. It also warns of “heightened credit risk” and “increased pressure on margins”, and as such, an “adverse effect” on the 12 months ahead.
Typically, such a report card will not inspire investors to jump in. Yet, this past month, amid a wider rally of small cap stocks, Eindec has become the top performer on the SGX, with a gain of 383% between the end of July till Sept 2.
