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NewsZhulian upgraded to "market perform" as earnings stability seen, says Kenanga
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Zhulian upgraded to "market perform" as earnings stability seen, says Kenanga
by Cals Fri 18 Apr 2014, 02:25
| Zhulian upgraded to "market perform" as earnings stability seen, says Kenanga |
| Business & Markets 2014 |
| Written by Jeffrey Tan of theedgemalaysia.com |
| Thursday, 17 April 2014 10:25 |
KUALA LUMPUR (Apr 17): Kenanga Research has upgraded Zhulian Corp Bhd to "market perform" from "underperform" as the multi-level marketing firm's earnings are expected to stabilise after being hit previously.
In a note today, Kenanga analyst Khoh Wei Keen said Thailand’s political risk had been factored into Zhulian's share price, noting the event was beyond the company's control.
Khoh said Zhulian’s fundamentals remained intact with a strong balance sheet which includes net cash of RM149.3 million.
“(We) maintained our FY14 and FY15 earnings forecasts for now, but we may look at upgrading the stock post the Thailand election or when operating risks abate,” Khoh said.
Khoh also maintained Kenanga's target price of RM2.83 for Zhulian based on an
targeted FY14 price-earnings ratio of 15.4 times over Zhulian’s earnings per share of 18.4 sen.
Zhulian's financials have weakened. Yesterday, the firm said net profit fell to RM17.2 million in the first quarter ended February 28, 2014 from RM29.7 million a year earlier.
Khoh said Zhulian's net profit was broadly in line with Kenanga's expectations at 20.2% of full-year forecast. Zhulian's profit was however below consensus estimates at 12.2% of full-year forecast.
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