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Hot Stock Tomypak falls 5.38% on lower 2Q earnings, target price cut

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Hot Stock Tomypak falls 5.38% on lower 2Q earnings, target price cut Empty Hot Stock Tomypak falls 5.38% on lower 2Q earnings, target price cut

Post by Cals Fri 15 Aug 2014, 00:47

Hot Stock Tomypak falls 5.38% on lower 2Q earnings, target price cut
Business & Markets 2014
Written by Surin Murugiah of theedgemalaysia.com   
Thursday, 14 August 2014 09:48

KUALA LUMPUR (Aug 14): Tomypak Holdings Bhd  shares retreated in early trade on Thursday after its second quarter net profit fell on lower domestic sales and higher costs.
At 9.29am, Tomypak fell 5.38% or seven sen to RM1.23 with 283,600 shares done.
CIMB Research has maintained Reduce on Tomypak at RM1.30 with a lower target price of 70 sen (from RM1.17) and said Tomypak’s 2Q14 net profit was a disappointing 38% below house expectations, with 1H14 net profit accounting for only 23% of CIMB Research’s full-year estimate.
In a note Thursday, the research house said the weak 2Q net profit was mainly due to lower domestic sales and higher operating costs.
“We cut our FY14-16 EPS forecasts by 32-42%. This lowers our target price, still based on 7.8x CY15 P/E, a 40% discount to Daibochi’s 2015 13x P/E target.
“The stock remains a Reduce.
“Potential de-rating catalysts include further deterioration in EBITDA margins and declining domestic sales. For exposure to the sector, we prefer Daibochi,” it said.
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