KUALA LUMPUR (Jan 2): Public Investment Bank Bhd Research has upgraded Cypark Resources Bhd to “Outperform” at RM2.37 with a target price of RM2.62 and said Cypark reported a 4QFY17 net profit of RM18.2 million (+40.3% y-o-y), bringing its full year FY17 net profit to RM57.6 million (+11.4% y-o-y).

In a note today, the research house said excluding one-off ESOS expense, its full year core net profit jumped 21.5% y-o-y to RM62.8 million due to higher contribution from Environmental Engineering (EE) segment.

PublicInvest said the reported numbers were above house and consensus expectations, accounting for 121% and 125% of net profit estimates respectively.

“Earnings came in higher than our forecast due to lower-than-expected finance cost and higher-than-expected other income.

“We expect Cypark’s earnings under its Renewable Energy (RE) segment to improve from FY18 onwards, coming from additional biomass and biogas income following the completion of its Ladang Tanah Merah (LTM) project.

“As such, we forecast FY18F earnings to expand by 26.3% y-o-y. Given the upside potential of 10.5% to our unchanged SOP-target price of RM2.62, we upgrade our call to Outperform,” it said.