KUALA LUMPUR (Jan 21): JHM Consolidation Bhd’s share price erased losses at Bursa Malaysia’s afternoon break today after rising to a record high at RM2.33 in an apparent response to the electronics and mechanical products manufacturer’s growth outlook.

A common theme in RHB Investment Bank Bhd and Kenanga Investment Bank Bhd’s notes on JHM today involves the words growth and recovery as analysts predict the company will register organic expansion from existing customers and projects besides multiple new projects.

RHB analyst Lee Meng Horng said: "No disruptions on recovery path. Both automotive and industrial segments are poised for strong growth, banking on organic growth from existing customers/projects and multiple new projects and expansions.”

Kenanga analyst Samuel Tan said: “Recovery momentum to continue. Automotive segment’s recovery momentum will continue in FY21 as the group is eyeing a 25% year-on-year order growth from its existing customer, thanks to improving car sales."

On Bursa today, JHM’s share price settled up four sen or 1.79% at RM2.28 at the 12:30pm break after falling to its lowest so far today at RM2.18. 

Prior to the price fall, JHM’s share price had earlier today risen nine sen or 4.02% to a record high at RM2.33.

At 12:30pm, JHM settled at RM2.28, which gives the company a market capitalisation of about RM1.27 billion. The stock saw some eight million shares traded.

Lee said RHB upgraded JHM shares to "buy" from "neutral" with a higher target price of RM2.74 from RM1.91 previously following an upward earnings revision and renewed optimism, besides anticipation of a re-rating on the company’s migration to Bursa’s Main Market from ACE Market.

"We came away from a recent meeting with management, with a positive take on multi-pronged growth catalysts in FY21. We lift FY21/FY22 earnings by 6.2%/0.2% as we revise growth assumptions but cut the aerospace segment’s contributions,” the analyst said.

Tan said Kenanga kept its "market perform" recommendation on JHM shares but with a revised target price of RM2.35 from the previously estimated RM2.

"Maintain FY20E and FY21E NP (net profit) of RM24.0 million and RM49.8 million, respectively,” Tan said.