AffinHwang Capital raises target for KESM to RM16.40

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KUALA LUMPUR (March 20): AffinHwang Capital Research has maintained its “Buy” rating on KESM Industries Bhd at RM11 with a higher target price of RM16.40 (from RM11) and said while KESM’s earnings momentum remains positive and strong (core net earnings up 39% year-on-year), there was still much growth to be anticipated, considering the further increase in capex recently.

In a note today, the research house said with nearly 80% of revenue derived from the automotive segment, it sees KESM as a solid proxy for the structural automotive growth story.

“We raise our target price to RM16.40, from RM11, and reaffirm our Buy call,” it said.