Hot Stock KLK a top loser after first half earnings miss expectations

by **hlk** Thu 23 May 2013, 18:08

Business & Markets 2013
Written by Ho Wah Foon of theedgemalaysia.com
Thursday, 23 May 2013 16:29
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KUALA LUMPUR (May 23): KUALA LUMPUR KEPONG BHD [] (KLK)
became the third top loser in late afternoon trades, after analysts said
its second half results in the current financial year had missed
expectations.
“KLK’s 1HFY13 core net profit of RM456 million was within our
expectations, but missing consensus by 9% after stripping out a fair
value gain of RM10.8 million on outstanding derivative contracts,” said
Public Investment Bank in a note.
“KLK’s 1HFY09/12 core net profit of RM459.8 came in below
expectations, accounting for only 40.9% and 36.3% of our and
consensus full-year estimates,” said Hong Leong Investment Bank in its
note today.
At 4.01 pm today, KLK share fell 32 sen or 1.5% to RM21.38 per unit,
on trades of 467,000 shares, after hitting a low of RM21.10 earlier.
While Public IB maintains its “neutral” call on KLK with an unchanged
target price of RM21.04, Hong Leong IB gives a “hold” call on KLK with
a 3.4% lower TP of RM18.79 “to reflect its latest net debt position”.
CIMB’s PLANTATION [] analyst Ivy Ng continues to rate KLK an
“underperform” in view of its expensive valuation relative to its target
market P/E of 15.6x.
Yesterday, KLK said it posted a net profit of RM209.7 million for the second quarter ended March 2013, a 2.4% year-on-year
drop compared to RM214.9 million a year ago. Its revenue for the second quarter also decreased to RM2.24 billion from
RM2.62 billion.
Reviewing its results, KLK said the fall in profit was due to mainly to decline in palm oil prices, which caused its plantations
sector to record a 36.3% fall in profit to RM191.6 million.
KLK said due to the current low palm products prices, the group's plantations profit will be much lower than that of the
previous year although its oleochemical and property divisions will continue to do well.
Overall, the group foresees a lower profit for the current financial year.