Kenanga lowers JCY net profit forecast

Kenanga Research has lowered JCY International Bhd's net profit forecast
for the 2013 and 2014 financial years by 80 per cent and 14 per cent,
respectively, to account for a lower gross profit margin assumption.

The research house said lacklustre personal computer (PC) demand had suppressed the group's revenue growth.

Given its core business, the manufacturing of hard disk drive is heavily dependent on PC sales, it said in a note today.

The
group reported a net loss of RM20.8 million for the second quarter
ended March 31, 2013, widening its losses to RM46.5 million as at the
first half of its 2013 financial year, due to lower revenue and higher
cost of sales.

"We maintain our 'underperform' call on the group,
with a downgraded target price of 54 sen, from 58 sen, previously,"
Kenanga Research added.

Meanwhile, RHB Research raised its 2013 loss estimate for the group by RM27.3 million, given the weak results.

"However,
with some minor housekeeping adjustments, we cut our 2014 financial
year core loss projection by RM5.2 million," it said in a separate
research note.

RHB Research maintained its 'sell' call on the group, with a fair value of 42 sen.-- Bernama