KUALA LUMPUR (April 19): CIMB IB Research has maintained its “Add” rating on Malaysian Pacific Industries Bhd (MPI) at RM11.84 with a higher target price of RM13 (from RM11) and said MPI’s 9MFY6/17 core net profit beat expectations at 86%/85% of house/consensus full-year forecasts on better-than-expected cost savings and favourable forex movements.
In a note today, the research house said 3QFY6/17 EPS rose 48% yoy due to a better product mix from higher margin packages and improving efficiencies amidst higher effective tax rate.
CIMB Research said MPI declared a higher interim dividend of 19 sen, above our expectation of 16 sen.
“We raise FY17-19F EPS by 11% to account for better product mix. Maintain Add with higher RM13.00 target price, based on 14x CY18 P/E, in line with sector mean.
“We expect MPI to register FY16-19F EPS CAGR of 10%, driven by higher sales from newer and more advanced packages, as well as better operating efficiency,” it said.