KUALA LUMPUR (May 31): CIMB IB Research has maintained its “Add” rating on Kawan Food Bhd at RM3 with a lower target price of RM3.50 (from RM4.48) and said that at 10% of house full-year forecast, Kawan’s 1Q16 net profit was below its expectations due to forex losses during the quarter.
In a note yesterday, the research house said Kawan’s new factory will only be ready by year-end, a delay of 3-4 months.
“Ready-to-eat market is potentially a huge market for Kawan. It also plans to sell frozen seafood.
“Cut FY16-18F EPS to reflect the delay in construction of new factory.
“Maintain Add; we are long-term positive on potential earnings from new factory,” it said.