Kimlun falls 4.07% on downgrade, target price cut

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KUALA LUMPUR (May 31): Kimlun Corporation Bhd fell 4.07% early today in thin trade after Hong Leong IB Research  downgraded the stock to “Hold” at RM1.72 with a lower target price of RM1.66 (from RM2.65) and said Kimlun’s 1QFY18 earnings of RM13 million (-48% QoQ, -18% YoY) was below house expectations and consensus.

At 9.10am today, Kimlun fell 7 sen to RM1.64 with 5,300 shares done.

In a note today, the research house said the disappointment was due to lower manufacturing margin resulting from higher fixed cost, lower margin product mix and stronger ringgit vs SGD.

“On a brighter note, construction witnessed strong topline growth and margin expansion.

“However, looking forward, we turn cautious on the job flow outlook given the change in administration post GE14.

“Cut FY18-19 earnings by 14% and 15% respectively. Downgrade from Buy to Hold with RM1.66 target price (8x FY18 earnings),” it said.

KUALA LUMPUR (May 31): Kimlun Corporation Bhd fell 4.07% early today in thin trade after Hong Leong IB Research  downgraded the stock to “Hold” at RM1.72 with a lower target price of RM1.66 (from RM2.65) and said Kimlun’s 1QFY18 earnings of RM13 million (-48% QoQ, -18% YoY) was below house expectations and consensus.

At 9.10am today, Kimlun fell 7 sen to RM1.64 with 5,300 shares done.

In a note today, the research house said the disappointment was due to lower manufacturing margin resulting from higher fixed cost, lower margin product mix and stronger ringgit vs SGD.

“On a brighter note, construction witnessed strong topline growth and margin expansion.

“However, looking forward, we turn cautious on the job flow outlook given the change in administration post GE14.

“Cut FY18-19 earnings by 14% and 15% respectively. Downgrade from Buy to Hold with RM1.66 target price (8x FY18 earnings),” it said.