Thursday 28 Mar 2024
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KUALA LUMPUR (March 21): Shares in Superlon Holdings Bhd fell as much as 10 sen or 6.25%, making it one of the top losers across Bursa Malaysia, after the nitrile butadiene rubber insulation manufacturer's nine months ended Jan 31, 2018 (9MFY18) results missed an analyst's forecast.

Superlon's net profit for 9MFY18 fell 37.2% to RM10.89 million from RM17.35 million a year ago. However, 9MFY18 revenue came in 14% higher at RM84.03 million compared with RM73.72 million in the previous year, the company said in a Bursa Malaysia filing yesterday.

At 2pm, the counter was traded at RM1.50, down 48.6% from RM2.92 — the highest closing since mid-September last year.

A total of 371,900 units were transacted, giving it a market capitalisation of RM238.2 million.

Over the past 12 months, Superlon has gained about 18.74%.

MIDF Amanah Investment Bank Bhd Research analyst Ng Bei Shan wrote in a note today that the recovery in 2HFY18 has been weaker than expected as raw material costs came in higher than expected while average selling price has been lower than expected.

"Superlon's 9MFY18 earnings came in below our expectations, making up 59% of our full-year forecast.

"Profit for 9MFY18 fell by 37.2% y-o-y to RM10.9 million mainly due to the high prices of raw material inventories which plagued the company's performance in 1HFY18," Ng said.

The research house has maintained a "buy" recommendation on the counter with an adjusted target price of RM1.82 from RM2.39 as company earnings growth is expected to return in FY19, driven by the demand for insulating products as well as heating, ventilation and air-conditioning parts.

"In FY19, we also expect the new plant in Vietnam to start operating in line with Superlon's market expansion plan. It also has a net cash of RM18 million while dividend yield is decent at 3.4%," it added.

 

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