MARKET DEVELOPMENT
CIMB Maintains Add on QL Resources
CIMB Maintains Add on QL Resources
24/11/2015 (The Star) - CIMB Research maintains its Add call on QL Resources with a higher target price of RM5.26, as it rolled over its P/E valuation of 23 times to 2017.
QL remains the research house’s top pick for the consumer sector. CIMB added that strong earnings growth from new ventures and capacity expansion in its main business are potential re-rating catalysts.
QL’s second quarter for the financial year ending March 31, 2016 core net profit jumped 14.5% year-on-year to RM55.2mil, while revenue increased 5.2% year-on-year to RM609.4mil.
Cumulatively, first half core net profit grew 8.9% year-on-year to RM96.1mil on higher revenue of RM1.35bil. CIMB said QL’s first half core net profit made up for 44% of its full-year and consensus forecasts.
“We consider this as broadly in-line, as the second half is seasonally the stronger period. No dividend was declared, as expected,” it said in a note on Monday.
The company’s marine product manufacturing (MPM) segment performed the best in the second quarter. Pre-tax profit jumped 36.8% year-on-year to RM42.7mil, with revenue growing 20.4% year-on-year to RM206.9mil. This brought first half pre-tax profit to RM79.2mil, while revenue rose 14.6% year-on-year to RM393.4mil.
The “highly encouraging” performance was attributed mainly to higher export contribution of fishmeal, surimi and surimi-based products as a consequence of a weaker ringgit, said CIMB.
QL’s palm oil activities recorded a 32.6% drop in pre-tax profit to RM3.6mil in the second quarter, while revenue declined 7.5% year-on-year to RM77.4mil. For the first half, the segment’s pre-tax profit shrank 28.9% to RM6.9mil, with revenue fell 10.8% year-on-year to RM167.3mil.
The weak performance was due to lower FFB processed and lower CPO prices.
The integrated livestock farming (ILF) posted 1.3% year-on-year increase in turnover to RM406.2mil during the quarter but pre-tax earnings slid 5.2% year-on-year to RM24.4mil.
First half revenue was 0.8% higher at RM785mil but pre-tax profit declined 15.4% to RM37.4mil.
ILF earnings declined due to lower poultry farm produce prices in Peninsular Malaysia.
QL remains the research house’s top pick for the consumer sector. CIMB added that strong earnings growth from new ventures and capacity expansion in its main business are potential re-rating catalysts.
QL’s second quarter for the financial year ending March 31, 2016 core net profit jumped 14.5% year-on-year to RM55.2mil, while revenue increased 5.2% year-on-year to RM609.4mil.
Cumulatively, first half core net profit grew 8.9% year-on-year to RM96.1mil on higher revenue of RM1.35bil. CIMB said QL’s first half core net profit made up for 44% of its full-year and consensus forecasts.
“We consider this as broadly in-line, as the second half is seasonally the stronger period. No dividend was declared, as expected,” it said in a note on Monday.
The company’s marine product manufacturing (MPM) segment performed the best in the second quarter. Pre-tax profit jumped 36.8% year-on-year to RM42.7mil, with revenue growing 20.4% year-on-year to RM206.9mil. This brought first half pre-tax profit to RM79.2mil, while revenue rose 14.6% year-on-year to RM393.4mil.
The “highly encouraging” performance was attributed mainly to higher export contribution of fishmeal, surimi and surimi-based products as a consequence of a weaker ringgit, said CIMB.
QL’s palm oil activities recorded a 32.6% drop in pre-tax profit to RM3.6mil in the second quarter, while revenue declined 7.5% year-on-year to RM77.4mil. For the first half, the segment’s pre-tax profit shrank 28.9% to RM6.9mil, with revenue fell 10.8% year-on-year to RM167.3mil.
The weak performance was due to lower FFB processed and lower CPO prices.
The integrated livestock farming (ILF) posted 1.3% year-on-year increase in turnover to RM406.2mil during the quarter but pre-tax earnings slid 5.2% year-on-year to RM24.4mil.
First half revenue was 0.8% higher at RM785mil but pre-tax profit declined 15.4% to RM37.4mil.
ILF earnings declined due to lower poultry farm produce prices in Peninsular Malaysia.