KUALA LUMPUR (July 1): CIMB Research has lowered its target price (TP) for Cypark Resources Bhd shares to RM1.71 from RM1.76 to reflect an earnings revision, which factors in the potential penalty from the delay in the group's waste-to-energy (WTE) plant's commercial operation date (COD).

CIMB analyst Ngo Siew Teng said today in a research note that the research house revised up its Cypark earnings per share (EPS) estimates by 10% for financial year ending Oct 31, 2019 (FY19) on expected lower finance cost. Ngo said CIMB, however, cut its Cypark FY20 EPS forecast by 5% to factor in the potential penalty from the delay in the WTE plant's COD.

"Maintain Hold given the anticipated weaker FY19-20F earnings due to the delay in the WTE plant's COD," she said in the note, which was issued following the announcement of Cypark's 2QFY19 results on Friday (June 28).

The group said 2QFY19 net profit increased on-year to RM19.34 million from RM18.75 million, while net profit for 1HFY19 rose to RM32.35 million from RM31.01 million.

Today, Ngo said Cypark's 1HFY19 core net profit was in line with CIMB's expectations at 54% of full-year forecast but below Bloomberg consensus estimates at 44% of full-year estimates.

At 11:30am, Cypark shares were traded unchanged at RM1.56. The stock saw 140,100 shares transacted.