KUALA LUMPUR (Feb 21): IOI Corp Bhd fell as much as 12 sen or 2.54% to RM4.61 so far today after the plantation group announced yesterday second quarter net profit dropped to RM195.5 million from RM595.9 million a year earlier.

IOI Corp said revenue for the second quarter ended Dec 31, 2018 (2QFY19) slipped to RM1.88 billion from RM2.01 billion. For 1HFY19, IOI Corp said net profit fell to RM339.3 million from RM955.9 million a year earlier.

At 10:42am today, IOI Corp shares were traded at RM4.65 with 860,700 units transacted.

Hong Leong Investment Bank Bhd wrote in a note today it downgraded IOI Corp shares to 'sell' from "hold" as valuation "has become lofty after recent share price appreciation".

The research firm, however, raised its IOI Corp share target price (TP) to RM4.04 from RM4.03.

"We maintain our FY19-21 core net profit forecasts but raise our SOP (sum-of-parts)-derived TP by 0.2% as we updated IOI's latest quarterly net debt position. Downgrade rating to SELL (from Hold) as valuation has become lofty after recent share price appreciation (+7.5% YTD (year to date)). While we expect 2HFY19 performance to improve vis-à-vis 1H19, we believe share price has run ahead of fundamentals.

"IOI's 1HFY19 core net profit of RM386.3 million (-41.4%) came in within our expectation, accounting for 46% of our full-year forecast," Hong Leong said.