Written by CIMB Equities Research
Thursday, 22 April 2010 09:39
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KUALA LUMPUR: CIMB Equities Research raised the target price for CI Holdings Bhd from RM2.63 to RM3.28 pegged to an unchanged 20% discount to its 15x target market P/E in view of the stock’s relatively low liquidity.
"CI Holdings remains firmly a BUY, with the re-rating catalysts being 1) the strong 3Q performance, 2) an increasingly marketable product line, and 3) additional production capacity. Dividend yields are decent at 4-6%," it said on Thursday, April 22.
The research house said CI Holdings impressed it with its record 3QFY6/10 net profit of RM10.9 million, which took the nine-months bottomline to RM26.8 million, just 4% shy of its full-year forecast.
"This is the fourth straight quarter of results outperformance. This time around, it appears that we had underestimated the Chinese New Year sales volume. Taking our cue from the 3Q performance and additional production capacity, we raise our FY10-12 EPS forecasts by around 25%," it said.
CIMB Research also raised its DPS forecasts from 10 sen to 11 sen for FY11 and 12 sen for FY12 while maintaining its FY10 forecast of 10 sen.