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Monday, May 22, 2017

Tomypak skids early Thursday, CIMB Research keeps Reduce call

KUALA LUMPUR: Tomypak was among the top losers early Thursday as CIMB Equities Research continued to keep its Reduce call and target price of RM1.85.

At 9.15am, shares of the flexible packing company was down 15 sen to RM2.41 with 139,600 shares done.

The FBM KLCI fell 7.56 points or 0.46% to 1,628.16. Turnover was 87.55 million shares valued at RM52.14mil. There were 120 gainers, 125 losers and 176 counters unchanged.

CIMB Research said it maintained its EPS forecasts and target price, which is at a 40% discount to Daibochi’s 2017 13 times target, as it remains unconvinced about Tomypak’s rapid earnings recovery in FY16.

“The stock remains a Reduce. De-rating catalysts are expensive stock valuations and weak 1Q16 results. We continue to prefer Thong Guan for exposure to the packaging sector,” it said.

The research house said at 15% of its full-year forecast, Tomypak’s 1Q16 net profit was broadly in line with its expectations as it expects stronger earnings over the next few quarters.

Tomypak declared a first interim dividend per share of two sen, in line with expectations.

“We expect it to complete the 1:2 rights issue at RM1 rights issue price soon. Its new factory should be operational by 1Q17,” it said.


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