KUALA LUMPUR: MALAYSIAN PACIFIC INDUSTRIES [] Bhd (MPI) shares declined on Wednesday, Aug 17 after the company's net profit for the fourth quarter ended June 30, 2011 slumped to RM2.59 million from RM34.78 million a year earlier, due mainly to lower revenue and a stronger ringgit against the US dollar.
At 9.30am, MPI lost 12 sen to RM3.65.
CIMB Equities Research said lower-than-expected margins were to blame for MPI's earnings shortfall of 18% relative to its forecast and 13% relative to consensus estimates.
The research house also cut its target price from RM5.09 to RM4.21 as it widened the discount to its five-year historical adjusted price-to-book value average of 0.7 times from 40% to 50% in view of the poorer outlook for the sector and MPI's faltering earnings prospects.
'We reiterate our Neutral stance given the lack of catalysts and vulnerability to lower volumes. Switch to JCY for exposure to the tech sector,' it said on Aug 17.
MPI had said on Tuesday, Aug 16 that its revenue for the quarter fell to RM342.38 million from RM373.63 million in 2010.
Earnings per share was 1.34 sen while net assets per share was RM3.86.
For the financial year ended June 30, MPI's net profit fell to RM58.77 million from RM105.41 million in 2010, despite posting an increase in revenue to RM1.42 billion from RM1.39 billion.
Reviewing its performance, MPI said the appreciation of the ringgit against the US dollar and rising commodity prices continued to pose challenges to the company.
'However, the group will continue to implement the necessary measures to ensure satisfactory performance for the financial year ending June 30, 2012,' it said.
At 9.30am, MPI lost 12 sen to RM3.65.
CIMB Equities Research said lower-than-expected margins were to blame for MPI's earnings shortfall of 18% relative to its forecast and 13% relative to consensus estimates.
The research house also cut its target price from RM5.09 to RM4.21 as it widened the discount to its five-year historical adjusted price-to-book value average of 0.7 times from 40% to 50% in view of the poorer outlook for the sector and MPI's faltering earnings prospects.
'We reiterate our Neutral stance given the lack of catalysts and vulnerability to lower volumes. Switch to JCY for exposure to the tech sector,' it said on Aug 17.
MPI had said on Tuesday, Aug 16 that its revenue for the quarter fell to RM342.38 million from RM373.63 million in 2010.
Earnings per share was 1.34 sen while net assets per share was RM3.86.
For the financial year ended June 30, MPI's net profit fell to RM58.77 million from RM105.41 million in 2010, despite posting an increase in revenue to RM1.42 billion from RM1.39 billion.
Reviewing its performance, MPI said the appreciation of the ringgit against the US dollar and rising commodity prices continued to pose challenges to the company.
'However, the group will continue to implement the necessary measures to ensure satisfactory performance for the financial year ending June 30, 2012,' it said.
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