Cheetah reported 1QFY10 revenue and net profit of RM40.1m and RM5.4m respectively, representing 40% of our full year forecast of RM13.6m, which we deem in line given that 1H earnings usually account for 60% of full year earnings. Revenue was flat while earnings declined by 12.3% y-o-y. 1QFY10 EBIT margin narrowed by 2.5% pts y-o-y mainly due to the higher operating expenses which was associated with the opening of more point-of-sales (consignment counters) as well as the higher depreciation cost recorded. We maintain our FY09 and FY10 earnings forecast at RM13.6m and RM14.5m respectively. Our TP is unchanged at RM0.66.
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