KUALA LUMPUR (March 28): Public IB Research has downgraded NTPM Holdings Bhd to Underperform (from Neutral) with a revised target price of 88 sen and said NTPM’s 3QFY16 revenue grew 13.1% y-o-y to RM161 million, while 9MFY16 revenue increased by 10.7% y-o-y to RM457.1 million, which was 79% of our FY16 forecasts.

In a note today, the research house said NTPM’s net profit for 3QFY16 jumped 33.1% y-o-y to RM17.7 million, bringing 9MFY16 net profit to RM47.6 million (+61.6% y-o-y).

The research house said it expects to see NTPM reaping benefits from its Vietnam investment, as income stream becomes more significant in the long term.

“We revise our earnings estimates upwards by 27-30% for FY16F-18F, as we account for stronger quarterly sales due to higher volume as well as margin expansion.

“We thus revised our target price to 88 sen, pegged to 14x our FY17F EPS of 6.3sen.

“However, NTPM’s share price has risen sharply by 21% year to-date. As such, we downgrade our call on the stock from Neutral to Underperform,” it said.