Friday 29 Mar 2024
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KUALA LUMPUR (March 25): Affin Hwang Capital Research has downgraded Apex Healthcare Bhd to “Hold” at RM9.25 with a lower target price (TP) of RM8.81 (from RM10.34) and said it expects 2019 to be a challenging year for Apex Healthcare given the: i) additional start-up expenses from Apex’s new plant, SPP NOVO, ii) later-than-expected kick-start of sales from SPP NOVO, and iii) absence of the reinvestment allowance.

In a note today, the research house said in view of this, it cut house earnings estimates by 15-24% for 2019-21E and downgrade its call on Apex to Hold from Buy with a lower TP of RM8.81.

“While we look forward to the contribution from SPP NOVO and remain upbeat on Apex’s long-term prospects, we expect near-term earnings to be weak, given the estimated 1-2 years’ gestation period for SPP NOVO,” it said.

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