KUALA LUMPUR: Shares of UNISEM (M) BHD [] extended their losses in late afternoon on Thursday, April 28 sliding to a low of RM1.84 after downgrades by research houses following the weaker earnings in the Jan-March quarter.
At 2.57pm, it was down 13 sen to RM1.84 with 7.27 million shares done.
The FBM KLCI was up 3.32 points to 1,533.23. Turnover was 519.91 million shares done valued at RM697.07 million. There were 307 gainers, 339 losers and 315 stocks unchanged.
Affin Investment Bank Research had downgraded Unisem to SELL and the Target Price was cut to RM1.16.
It said industry data points such as inventory and new orders continue to remain weak, leaving little re-rating catalyst in the near term.
'We remain concern over the impact of; 1) high unemployment levels which will inevitably impact consumption demand; 2) increase in global liquidity which has been fuelling the rise in prices of commodities and hence key components such as gold and copper; and 3) the strength of the ringgit which will continue to put pressure on revenue and earnings.
'Post our earnings downgrade, our target price is reduced to RM1.16 (previously RM1.70), which is based on an unchanged mid-cycle valuation PE of 7.6x. Given the 41% downside from current levels, we downgrade Unisem to a SELL from REDUCE,' Affin Research said.
UOB Kay Hian Research downgraded the stock to SELL and cut its target price from RM1.92 to 99 sen, pegged at 8x 2011F PE (in line with historical PE multiples), implying a 0.6x P/B. Unisem was trading at less than 0.5 times P/B when earnings troughed in 1H09.
'Unless the US$ rate reverts to previous levels, Unisem's share price should continue to trail the market,' it said.
At 2.57pm, it was down 13 sen to RM1.84 with 7.27 million shares done.
The FBM KLCI was up 3.32 points to 1,533.23. Turnover was 519.91 million shares done valued at RM697.07 million. There were 307 gainers, 339 losers and 315 stocks unchanged.
Affin Investment Bank Research had downgraded Unisem to SELL and the Target Price was cut to RM1.16.
It said industry data points such as inventory and new orders continue to remain weak, leaving little re-rating catalyst in the near term.
'We remain concern over the impact of; 1) high unemployment levels which will inevitably impact consumption demand; 2) increase in global liquidity which has been fuelling the rise in prices of commodities and hence key components such as gold and copper; and 3) the strength of the ringgit which will continue to put pressure on revenue and earnings.
'Post our earnings downgrade, our target price is reduced to RM1.16 (previously RM1.70), which is based on an unchanged mid-cycle valuation PE of 7.6x. Given the 41% downside from current levels, we downgrade Unisem to a SELL from REDUCE,' Affin Research said.
UOB Kay Hian Research downgraded the stock to SELL and cut its target price from RM1.92 to 99 sen, pegged at 8x 2011F PE (in line with historical PE multiples), implying a 0.6x P/B. Unisem was trading at less than 0.5 times P/B when earnings troughed in 1H09.
'Unless the US$ rate reverts to previous levels, Unisem's share price should continue to trail the market,' it said.
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