KUALA LUMPUR (March 11): Shares in KESM Industries Bhd rose 2.4% at mid-morning today, after the chip testing company said its net profit nearly quadrupled to RM1.86 million in its second quarter ended Jan 31, 2020, from RM474,000 a year ago.

At 10.22am today, KESM rose 19 sen to RM8.25, valuing it at RM355 million. Trading volume was relatively subdued with only 49,900 shares traded.

Affin Hwang Capital Research said in a note that the Covid-19 outbreak and recent oil crisis could push back consumption spending on the automotive sector, in turn posing a negative impact on KESM’s earnings, and hence it revises down KESM’s earnings forecast by a magnitude of 21% to 45%.

However, the research house maintains its target price of RM8.21 on KESM with a "hold" rating.

It believes that the company is well-positioned to benefit from the next upturn with its strong net cash position and management appeal.

Meanwhile, CGS-CIMB Research cut its target price on KESM from RM7.50 to RM6.50 with a “sell” rating, in view of tepid demand and supply disruption.