Poh Kong – an undervalued gold proxy?

From 2001 to 2023, there is a 0.74 correlation between the revenue of Poh Kong and the price of gold. This meant that about half of the changes in Poh Kong’s revenue can be explained by changes in the price of gold.

Gold prices have been on an uptrend over the past couple of months. I am not sure whether it will continue to go up further. But I am sure that Poh Kong will have better business results in the short term to mid-term.

The interesting thing is that from a short term (6 months) perspective, there were more than 80% correlation between Poh Kong share price and gold prices during periods of gold price uptrends.

For the investor, there are 2 questions when looking at Poh Kong

• Will gold prices will continue to go up?

• Have the share price fully captured all the gold price increase?