KUALA LUMPUR: OSK Research said while Perwaja's 2Q net profit improved 49.9% q-o-q, the cumulative 1HFY10 net profit of RM33.1 million was way below of its and street estimates.
It said on Monday, Aug 30 that other than the untimely procurement and selling which translated into only flat margin q-o-q, 'we also suspect its conversion costs came in higher than expected'.
'While the company's earnings are unimpressive, we have incorporated 0.75x NTA/share to capture its plant and machinery valuation, besides retaining our 6x PER on FY10 numbers. Our new target price of RM0.92 warrants a downgrade to SELL,' it said.
It said on Monday, Aug 30 that other than the untimely procurement and selling which translated into only flat margin q-o-q, 'we also suspect its conversion costs came in higher than expected'.
'While the company's earnings are unimpressive, we have incorporated 0.75x NTA/share to capture its plant and machinery valuation, besides retaining our 6x PER on FY10 numbers. Our new target price of RM0.92 warrants a downgrade to SELL,' it said.
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