KUALA LUMPUR (March 9): KESM Industries Bhd topped Bursa Malaysia decliners on Wednesday morning (March 9) after the former's share price fell as much as RM1.10 or 12.09% to RM8 following the semiconductor test service provider's Tuesday report on its second-quarter net loss of RM1.01 million compared to a net profit of RM6.33 million a year earlier.
KESM announced on Tuesday that its revenue fell to RM64.3 million for the second quarter ended Jan 31, 2022 (2QFY22) from RM67.96 million a year earlier.
For the first half ended Jan 31, 2022 (1HFY22), KESM said its cumulative net profit decreased to RM6.51 million from RM7.1 million a year earlier, while revenue grew to RM132.88 million from RM129.07 million.
On Wednesday, analysts said the company's 1HFY22 core net profit at about RM4 million, excluding non-recurring items, missed expectations.
CGS-CIMB Securities Sdn Bhd analyst Mohd Shanaz Noor Azam wrote in a note: "[KESM's] 1HFY22 core net profit missed expectations at 34%/36% of our/Bloomberg consensus FY22 forecasts due to weaker sales in 2QFY22.
"We revise down our FY22-24F EPS (earnings per share forecasts) for KESM by 1%-16% to account for lower utilisation, but remain cautiously optimistic about a stronger pickup in 2HFY22 in view of the improving supply chain situation.
"We maintain our 'hold' call for KESM shares, with a lower TP (target price) of RM9.50," Mohd Shanaz noted.
He said CGS-CIMB's previous TP for the stock stood at RM12.70.
Kenanga Investment Bank Bhd analyst Samuel Tan, on the other hand, wrote in a note that KESM's 1HFY22 core net profit of RM3.9 million came in below Kenanga's expectations but within the consensus forecast.
He said the company's 1HFY22 core net profit accounted for 28% and 51% of Kenanga's and the consensus full-year core net profit estimates respectively.
The analyst said Kenanga had reduced its FY22 and FY23 core net profit forecasts by 63% and 34% to RM5.3 million and RM13.9 million respectively for KESM.
"We maintain 'market perform' with a lower TP of RM8.50 [for KESM shares]," he added.
According to Tan, Kenanga's previous TP for the stock stood at RM11.40.