Hot Stock Bonia rises 5% after positive reports by analysts

by **Cals** Fri 11 Apr 2014, 14:29

Hot Stock Bonia rises 5% after positive reports by analysts

Business & Markets 2014

Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com

Friday, 11 April 2014 11:52

KUALA LUMPUR (Apr 11): Bonia Corporation Bhd rose as much as 4.7% today after analysts have highlighted the company’s good growth strategy and bright outlook.

At 11.41 am, Bonia’s shares were traded at RM5.54, up 17 sen or 3.2% with some 792,100 shares done.

The stock was among the top gainers on the bourse, rising as much as 25 sen or 4.7% to a high of RM5.62 in earlier trades.

An analyst told theedgemalaysia.com that the stock is rising today after recent positive reports by several research houses.
CIMB Investment Bank Bhd said in a note Thursday that Bonia is becoming a truly regional premium brand and is bullish on its plans for international expansion.

The research house also said that the company is “massively undervalued.”

“Although Bonia’s share price has risen by 25% year to date, we believe that the stock is still trading at a huge discount to its intrinsic value,” said CIMB.

The research house added that Bonia’s net profit is expected to increase by 124% from FY13 to FY16.

“As such, we are of the opinion that Bonia’s current valuation does not reflect the company’s earnings growth trajectory, as it is trading at only 13.2 times FY15 PER and 10.8 times FY16 PER,” it said.

The research house had initiated coverage on the stock with an “add” rating and an initial target price of RM8.11 per share.

AmResearch Sdn Bhd also views the company positively, saying it expects more institutional funds to invest in Bonia.

“We expect institutionalisation to expand further, underpinned by its robust earnings trajectory and broadening geographical presence,” said the research house.

The research house reaffirmed its “buy” call on the stock, but had increased the target price for the stock to RM5.40 from RM4.50.