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Unisem down on Q1 net loss
by hlk Thu 03 May 2012, 13:45
KUALA LUMPUR: Shares of Unisem fell to a low of RM1.41 on Thursday after it reported a net loss of RM13.5mil in the first quarter compared with a net profit of RM5.1mil a year ago.
At 11.28am, it was down four sen to RM1.42. There were 762,100 shares done at prices ranging from RM1.41 to RM1.44.
The FBM KLCI reversed from its earlier losses to edge up 0.03 of a point to 1,582.42. Turnover was 641 million shares valued at RM351mil. There were 224 gainers, 278 losers and 282 stocks unchanged.
Affin Investment Research said the Q12012 net loss was due to a sharp 12.1% decline in revenue to RM256.6mil. The loss was also attributable to weaker operating margins.
"We are upgrading Unisem to an ADD from Sell, which is consistent with our view that earnings are likely to have bottomed out in 4Q11/1Q12. With the inventory imbalance in the system fully played out, we think that a sector recovery could be underway.
"However, in light of the frail global economic conditions and the risk of a deeper recession in the Euro region, we believe that a recovery is likely to be modest at best. We have raised our target price for Unisem to RM1.55 (previously RM1.00) based on a mid-cycle recovery P/BV multiple of 1.0 times and FY12 book value (stock has traded as high as 1.6 times P/BV in its recent upcycle)," it said
At 11.28am, it was down four sen to RM1.42. There were 762,100 shares done at prices ranging from RM1.41 to RM1.44.
The FBM KLCI reversed from its earlier losses to edge up 0.03 of a point to 1,582.42. Turnover was 641 million shares valued at RM351mil. There were 224 gainers, 278 losers and 282 stocks unchanged.
Affin Investment Research said the Q12012 net loss was due to a sharp 12.1% decline in revenue to RM256.6mil. The loss was also attributable to weaker operating margins.
"We are upgrading Unisem to an ADD from Sell, which is consistent with our view that earnings are likely to have bottomed out in 4Q11/1Q12. With the inventory imbalance in the system fully played out, we think that a sector recovery could be underway.
"However, in light of the frail global economic conditions and the risk of a deeper recession in the Euro region, we believe that a recovery is likely to be modest at best. We have raised our target price for Unisem to RM1.55 (previously RM1.00) based on a mid-cycle recovery P/BV multiple of 1.0 times and FY12 book value (stock has traded as high as 1.6 times P/BV in its recent upcycle)," it said
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