KUALA LUMPUR (Feb 23): Hextar Global Bhd rose as much as 12 sen or 10.91% to RM1.22 this morning, after the group posted stellar results and announced a bonus issue.

At noon break, the counter pared gains to RM1.21, still up 11 sen or 10%. The counter saw some 15.93 million shares traded.

The group announced yesterday that its net profit grew 48.17% to RM11.51 million in the fourth quarter ended Dec 31, 2020, from RM7.77 million a year earlier on the back of a strong performance by its agrochemical segment.

It also announced a bonus issue of up to 492.4 million new shares on the basis of three new shares for every five existing shares.

Public Invest Research's analyst Ching Weng Jin said in a note today the group's net profit made up 96% of his full-year estimates, which he deemed the achievement as in line with his expectation.

"In fact, our estimate assumes about 10% coming from acquisition-related growth which did not materialise in 2020, meaning that the numbers recorded were purely organic, and had exceeded expectations," he said.

Ching continued to like Hextar Global's prospects, with scope for growth and upside still ample despite it already being the market leader in the domestic agrochemical market space.

"We gather activity on the acquisition front will pick up this year," he said.

While he keeps Hextar Global earnings estimates unchanged at this juncture, he raises its target price to RM1.30 from 91 sen previously on a higher 20 times multiple to a rolled-over FY22 earnings per share of 6.5 sen.

He also affirmes his outperform call on the stock.

"We believe the higher multiple is appropriate given the potential (and expectedly stronger) earnings growth from its acquisition activities yet to be fully accounted for, and management's ability to deliver," he added.