KUALA LUMPUR (Jan 29): Shares of Oceancash Pacific Bhd (OCP) fell 9.52% at mid-morning today on profit taking, after it had surged some 57% yesterday.

At 11.11am, OCP fell 9.52% or 7 sen to 66.5 sen, valuing it at RM163.13 million.

Meanwhile, CGS-CIMB Research downgraded OCP to “Reduce” at 74 sen with an unchanged target price (TP) of 53 sen, and said OCP’s 57.7% stock surge on Jan 28 may have been triggered by expectations that demand for non-woven products’ would spike with the coronavirus outbreak.

In a note Jan 28, the research house said the spillover benefits, however, are miniscule: OCP’s non-woven products used for face masks make up less than 1% of the group’s annual revenue.

“We think the share price surge provides a good opportunity to take profit, and thus downgrade our call to a Reduce with an unchanged TP of 53 sen.

“De-rating catalysts include better-than-expected containment of the coronavirus outbreak.

“We would turn positive on the stock, if it i) sees better-than-expected traction from its new hygiene segment customers and/or ii) incurs lower-than-expected operational costs for its Thailand relocation for its felt segment,” iCGS-CIMB Research said.