KUALA LUMPUR (Feb 21): CIMB Equities Research said MSM Malaysia Holdings’ record performance in FY11 may not be sustainable as future profit margins could be crimped by higher raw material costs.
It said on Tuesday that it was offset by the group’s strong cash flows and dividend yield prospects.
“FY11 net profit was in line at 101% of our forecast and 102% of consensus. The one sour note was the surprising absence of a final dividend.
“We fine-tune FY12-13 earnings for lower raw sugar costs, leading to a slightly higher target price (still based on 12.6 times P/E),” it said.
CIMB Research said it was maintaining Neutral rating in view of its 5% net dividend yield. Its target price for MSM was RM4.65.
It said on Tuesday that it was offset by the group’s strong cash flows and dividend yield prospects.
“FY11 net profit was in line at 101% of our forecast and 102% of consensus. The one sour note was the surprising absence of a final dividend.
“We fine-tune FY12-13 earnings for lower raw sugar costs, leading to a slightly higher target price (still based on 12.6 times P/E),” it said.
CIMB Research said it was maintaining Neutral rating in view of its 5% net dividend yield. Its target price for MSM was RM4.65.
