Hot Stock PIE falls 10.8% after poor 1Q earnings
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Hot Stock PIE falls 10.8% after poor 1Q earnings
- Hot Stock
[size=28]PIE falls 10.8% after poor 1Q earnings
By Tan Siew Mung / theedgemarkets.com | May 30, 2016 : 2:59 PM MYTKUALA LUMPUR (May 30): PIE Industrial Bhd, which reported a 80% fall in its net profit in the first quarter ended March 31, 2016 (1QFY16), came under selling pressure this morning and emerged as the top loser, after falling as much as RM1.42 or 10.8% to RM11.72.
The counter, which has fallen off from its five-year high of RM13.60 — its last closing price at April 22 — was last traded at RM11.86 at noon. The counter saw 343,900 shares traded, with a market capitalisation of RM909.41 million.
Last Friday, the Penang-based electronic manufacturing services (EMS) provider announced that its first quarter net profit fall 80% to RM2.1 million, from RM10.25 million a year earlier, as the electronic products contract manufacturer contended with foreign exchange (forex) losses and higher operating expenses.
Revenue, however, was higher at RM119.73 million, versus RM111.07 million.
Despite the financial results coming in below expectation, Kenanga Research maintained its “Outperform” call on the stock, with a target price of RM14.55 (or RM2.91 ex-split).
“Our positive view on the group remains unchanged, as the group is still registering better revenue and gross profit growths (year-on-year growth of 8% and 5% respectively), suggesting that operationally, the group’s earnings prospect remains resilient,” the research house said in a note to its client today.
It also noted that the US dollar has been stabilising to the research house forecast of RM4.05 to RM4.10 per USD for 2016 and 2017.
However, the research house lowered the company’s FY16 estimated net profit by 7% to account for the unfavourable forex fluctuation in its 1QFY16 results.
“Any price weakness from panic selling presents a buying opportunity, in our view,” it said.
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