Tuesday, August 23, 2011

JCY falls on 3Q losses, gloomy outlook

KUALA LUMPUR: Hard-disk drive manufacturer JCY International Bhd's shares fell in active trade on Tuesday, Aug 23 after it ''posted net loss RM31.86 million in the third quarter ended June 30, 2011 compared to net profit RM55.59 million a year earlier due mainly to higher raw material prices, inventory provision from depreciating US dollar and slow moving stocks.

At 11am, JCY fell four sen to 43 sen with 4.96 million shares done.

Revenue for the quarter fell 17.8% to RM395.17 million from RM480.79 million a year ago. Loss per share was 1.56 sen compared with earnings per share of 2.72 sen.

For the six months ended June 30, JCY posted net loss RM11.89 million compared with net profit of RM198.94 million in 2010. Its revenue was RM1.23 billion compared with RM1.56 billion a year ago.

OSK Research maintained its Sell recommendation on JCY and advised investors to stay away from the stock at this juncture as its amplified earnings volatility could prove to be too much of a risk appetite to swallow given the current gloomy global economic outlook.

'Changing our valuation basis from PER to P/NTA to highlight out cautions mode, our fair value now stands at 39 sen (from 41 sen) based on 0.9 times FY12,' it said on Aug 23.


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