KUALA LUMPUR (Oct 19): Kenanga Investment Bank Bhd has initiated coverage on D & O Green Technologies Bhd with a “market perform” rating and at a target price of 73 sen. Key investment merits include D & O's focus on growing its opto semiconductor product output for the automotive segment.

In a note today, Kenanga said D & O has exited the highly-competitive and less-profitable light-emitting diode (LED) markets for general lighting and LED TV to focus on the automotive segment.

"Note that its automotive segment which carries higher margins, is already contributing c.95% to the group’s revenue as of 1HFY17.

"As of 2QFY17, the group’s UR (utilisation rate) is already running at an optimal rate of 80%, contributed mainly by automotive business," Kenanga analyst Desmond Chong said.

At 3:33pm, D & O shares exchanged hands at 67 sen, with some two million shares traded. The stock was transacted between 66.5 sen and 69.5 sen so far today.