KUALA LUMPUR (Nov 18): Investors chased top gainer Dutch Lady Milk Industries Bhd shares to be entitled for the company's dividends after it reported higher net profit from a year earlier. Dutch Lady's latest financials have invited analysts' upgrades.

In a note today, Kenanga Investment Bank Bhd said the firm upped its Dutch Lady net profit forecast by 25.6% to 29.6% in financial years ending Dec 31, 2015 (FY15) and 2016, "assuming higher profit margins".

Kenanga said the profit upgrade led to a higher target price for Dutch Lady shares at RM58.51 versus RM48.07 previously. The higher fair value came with a recommendation upgrade to outperform from market perform for the stock.

"Moving forward, the sustainability of earnings growth outlook still hinges on the price movement of milk powder.

"Milk powder prices spiked up in September (MoM up 25.5%-32.6%) after Fonterra’s move to reduce the amount of products on offer but have since normalised starting in end-October (November average down 9.2%-11.1%) due to the weak global demand and ample production supply," Kenanga said.

At 9:35am, Dutch Lady shares rose 80 sen or 2% to RM48.52 for a market capitalisation of RM3.11 billion. The stock saw 14,000 shares done.

Yesterday, Dutch Lady reported higher net profit at RM49.95 million in 3QFY15 compared to RM28.55 million a year earlier. 9MFY15 net profit rose to RM115.76 million from RM75.89 million a year earlier.

The company declared total single-tier dividends of RM1.10 a share for the quarter in review. The dividends comprise standard and special payouts of 50 sen and 60 sen respectively.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)