SKP Resources’ outlook remains uncertain, says RHB Research

SKP Resources’ outlook remains uncertain, says RHB Research
Business & Markets 2014
Written by theedgemalaysia.com
Wednesday, 19 February 2014 07:03

KUALA LUMPUR (Feb 19): RHB Research has maintained its Sell rating on SKP Resources Bhd at 32 sen with a lower fair value of 18 sen (from 20 sen) and said SKP’s 3QFY14 results missed estimates, with revenue falling 17.3% quarter-on-quarter on weaker sales to its major customer, Dyson.
In a note Feb 18, the research house said SKP’s 9MFY14 net profit of RM21.8 million made up only 69% of house FY14 forecast.
“We expect SKP’s earnings to continue to be affected by: i) its dependence on its major customer, Dyson, and ii) the recent hike in electricity tariff. We trim our FY14/15 net profit forecasts by 10%/6.1% respectively, on incorporating higher expenses driven by the minimum wage policy and the electricity tariff hike.
“SKP’s outlook remains uncertain due to lukewarm consumer spending in China, one of Dyson’s major export markets.
“Maintain Sell, with a lower 18 sen fair value (from 20 sen),” it said.