KUALA LUMPUR (Feb 28): CIMB Equities Research said BOUSTEAD HOLDINGS BHD []’s FY11 core net profit, which excluded RM247 million one-offs, was below expectations at only 87% of its forecast and 85% of consensus numbers.
It said on Tuesday that a weaker-than-expected heavy industries division weighed down group earnings.
“Despite factoring in higher CPO prices and a lower tax rate, we reduce our ex-bonus FY12-13 core EPS by 6.4%-6.6% due to slower progress billings for heavy industries and a lower contribution from Pharmaniaga which is now 67.2% owned instead of 98%m,” it said.
CIMB Research said it made several key changes to its RNAV computation 1) update for the current value of listed assets, 2) raise its PLANTATION [] valuation and 3) update Boustead’s stake in Pharmaniaga.
“The net effect is a rise in our RNAV value. But we pare down our RNAV-based target price from RM5.47 to RM5.24 as we now apply a 10% RNAV discount in view of its volatile earnings. We continue to rate Boustead a Hold as there are no immediate catalysts,” it said.
It said on Tuesday that a weaker-than-expected heavy industries division weighed down group earnings.
“Despite factoring in higher CPO prices and a lower tax rate, we reduce our ex-bonus FY12-13 core EPS by 6.4%-6.6% due to slower progress billings for heavy industries and a lower contribution from Pharmaniaga which is now 67.2% owned instead of 98%m,” it said.
CIMB Research said it made several key changes to its RNAV computation 1) update for the current value of listed assets, 2) raise its PLANTATION [] valuation and 3) update Boustead’s stake in Pharmaniaga.
“The net effect is a rise in our RNAV value. But we pare down our RNAV-based target price from RM5.47 to RM5.24 as we now apply a 10% RNAV discount in view of its volatile earnings. We continue to rate Boustead a Hold as there are no immediate catalysts,” it said.
