Prestariang shares fall after weaker 1H earnings


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KUALA LUMPUR (Aug 21): Prestariang Bhd shares slumped 9.72% today, as its first half earnings fell short of consensus estimates yesterday.

The stock fell 21 sen to hit an intraday low of RM1.95 in early trade. As at 3.05pm, the counter was down 7.87% to trade at RM1.99, with 763,400 shares done. 
Prestariang's shares were trading between RM1.95 and RM2.14, making it the eight top loser on Bursa Malaysia.

Its share price has been on a downtrend since July 23, when it was trading at RM2.59, having retreated 64 sen or 24.71% for the period, underperforming the benchmark FBM KLCI's 2.15% decline.

Prestariang’s net profit for the six months ended June 30, 2015 (1HFY15) came in at RM9.1 million, down 32.3% from RM13.44 million in 1HFY14, making up 15% of consensus forecasts. The lower earnings was mainly dragged by softer margins from the software and services segment.

Revenue for 1HFY15, however, jumped 51.5% to RM75.03 million from RM49.64 million a year ago, mainly led by a sales growth in the software licences segment .

Despite lower earnings, Prestariang (fundamental: 3; valuation: 0.5) declared a second interim dividend of 1 sen per share for the financial year ending June 30, 2015.

PublicInvest Research said despite being far below expectations, it expects a significant pickup in Prestariang’s earnings in the following quarters given the recovery of contributions from the IC Citizen and 3P programmes, which have started again in 2QFY15.

"Pending more clarification from the analyst briefing today, we continue to maintain our outperform call with an unchanged target price of RM2.76," the research firm said in a note to clients today.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)