SKP’s 9MFY13 results were slightly below our and consensus forecasts. Its top- and bottom- lines rose by 14.7% and 27.8% y-o-y respectively, supported by better demand for the plastic injection moulding and its value-added services. Gross and EBIT margins were 1.3% and 1.4% better y-o-y on the back of a better product mix. Maintain BUY with its FV revised at RM0.49, based on 9x CY13 EPS after adjusting for the staggered conversion of its warrants.
Just a tad off target. SKP Resources’ 9MFY13 results were marginally lower than expected, accounting for 72.9% and 73.4% of consensus’ and OSK’s full-year forecasts respectively. Turnover and net profit grew by 14.7% and 27.8% y-o-y respectively on the back of stronger demand (+12.2% y-o-y) for its plastic moulding products and value-added services such as assembling plastic products and components for the electrical and electronics industry. Vis-à-vis last quarter, revenue and earnings slipped by 25.3% and 18.3% respectively from lower orders from existing customers, due to the softer economy. We believe the slowdown in sales will likely impact its performance in 4Q as well.
Better margins. Gross margin for the period widened by 1.3%, from 15.9% to 17.2%, while the EBIT margin inched up 1.4% from 11.6% to 13% y-o-y. The margins were buoyed by higher revenue and a solid product mix.
Maintain BUY. In view of the slower orders from its customers due to a tough operating environment, we are revising downwards our FY13 and FY14 forecasts by 4.9% and 6.7% respectively. We are optimistic on SKP’s future performance, as it will still be well-supported by: i) its client, Dyson’s expansion to China, and ii) stable orders from the company’s other clients. Our FV is adjusted to RM0.49 after trimming our forecast and factoring in a staggered conversion of its warrants given their long maturity period. Nonetheless, the dividend yield still remains attractive at 7.1%.
Just a tad off target. SKP Resources’ 9MFY13 results were marginally lower than expected, accounting for 72.9% and 73.4% of consensus’ and OSK’s full-year forecasts respectively. Turnover and net profit grew by 14.7% and 27.8% y-o-y respectively on the back of stronger demand (+12.2% y-o-y) for its plastic moulding products and value-added services such as assembling plastic products and components for the electrical and electronics industry. Vis-à-vis last quarter, revenue and earnings slipped by 25.3% and 18.3% respectively from lower orders from existing customers, due to the softer economy. We believe the slowdown in sales will likely impact its performance in 4Q as well.
Better margins. Gross margin for the period widened by 1.3%, from 15.9% to 17.2%, while the EBIT margin inched up 1.4% from 11.6% to 13% y-o-y. The margins were buoyed by higher revenue and a solid product mix.
Maintain BUY. In view of the slower orders from its customers due to a tough operating environment, we are revising downwards our FY13 and FY14 forecasts by 4.9% and 6.7% respectively. We are optimistic on SKP’s future performance, as it will still be well-supported by: i) its client, Dyson’s expansion to China, and ii) stable orders from the company’s other clients. Our FV is adjusted to RM0.49 after trimming our forecast and factoring in a staggered conversion of its warrants given their long maturity period. Nonetheless, the dividend yield still remains attractive at 7.1%.
Source: OSK
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