KUALA LUMPUR (Dec 1): CIMB Research has maintained its Add rating on Karex Bhd at RM3.04 with a higher target price of RM4.08 (from RM3.38) and said Karex’s 1QFY6/15 net profit was in line with expectations, at 20% of house full-year forecast and 20.3% of consensus.

In a note Nov 30, the research said it deemed this in line, as 1Q was seasonally low.

“1QFY15 revenue increased 7.2% year-on-year (y-o-y), driven by the higher condom sales volume. Net profit jumped 26.7% y-o-y in 1QFY15 due to better product mix, lower latex cost and favourable forex rates.

“We keep our FY15-17 EPS forecasts but raise our target price as we roll over our valuation from CY15 to 19x CY16 P/E (unchanged 20% premium to the previous rubber glove sector average).

“We maintain our Add rating on Karex, with strong demand and potential earnings upside from the acquisition of GP as re-rating catalysts. No dividend was declared, in line with our expectations,” it said.

At 12.04pm, Karex fell 0.66% or 2 sen to RM3.02 with 95,000 shares traded.