NEUTRAL by OSK
Poh Kong’s 1HFY09 earnings were in line with consensus and our estimates, with
revenue and earnings increasing 13.3% and 8.5% respectively, mainly due to the
strong sales during the year-end sales and festive seasons. 1HFY09 EBIT margin
was down slightly by 1.3-ppts y-o-y due to the change in product mix as consumers
opted for lower margin products. While its results seem reasonably good, we are
cautious that slowing consumer spending and the seasonal lull would eventually hit
the group’s earnings. Our target price has been reduced to RM0.32 on lower
earnings FY09 and FY10 forecasts of RM29.5m and RM31.2m respectively.
revenue and earnings increasing 13.3% and 8.5% respectively, mainly due to the
strong sales during the year-end sales and festive seasons. 1HFY09 EBIT margin
was down slightly by 1.3-ppts y-o-y due to the change in product mix as consumers
opted for lower margin products. While its results seem reasonably good, we are
cautious that slowing consumer spending and the seasonal lull would eventually hit
the group’s earnings. Our target price has been reduced to RM0.32 on lower
earnings FY09 and FY10 forecasts of RM29.5m and RM31.2m respectively.
Maintain NEUTRAL. Noting the fast deteriorating consumer spending, particularly in the
luxury goods segment, we have cut our FY09 and FY10 earnings forecast by 5.2% to
7.5% to RM29.5m and RM31.2m respectively. Accordingly, our target price has been
reduced to RM0.32, pegged at 4.4x CY09 EPS.