Stock Name: JTINTER
Company Name: JT INTERNATIONAL BHD
Research House: CIMB
KUALA LUMPUR: CIMB Equities Research says JT International's (JTI) 1Q10 net profit accounted for 33% of its full-year estimate and 31% of consensus. In a research note issued on Friday, May 14, it said the results were broadly in line with expectations as 1Q has historically been strong, accounting for 30-34% of full-year profits over the past three years. "We expect a weaker 2H as A&P expenses are typically backloaded. As expected, no dividends were declared for the quarter. We retain our FY10 earnings forecast but have upgraded FY11-12 by 4-6% to reflect JTI's strong sales momentum," it said. CIMB Research said while there are no changes to our dividend assumptions as we expect JTI to revert to its traditional payout of 30 sen/share, its DDM-based target price has been raised from RM5.10 to RM5.65 after revising downwards its cost of equity assumption from 9% to 8%. Although industry fundamentals remain unexciting, JTI's consistent market share gains and earnings growth are impressive. "We expect it to sustain the growth momentum, thanks to Winston's and Mild Seven's continued strength. This underpins our upgrade of the stock from Underperform to NEUTRAL," it said.
Company Name: JT INTERNATIONAL BHD
Research House: CIMB
KUALA LUMPUR: CIMB Equities Research says JT International's (JTI) 1Q10 net profit accounted for 33% of its full-year estimate and 31% of consensus. In a research note issued on Friday, May 14, it said the results were broadly in line with expectations as 1Q has historically been strong, accounting for 30-34% of full-year profits over the past three years. "We expect a weaker 2H as A&P expenses are typically backloaded. As expected, no dividends were declared for the quarter. We retain our FY10 earnings forecast but have upgraded FY11-12 by 4-6% to reflect JTI's strong sales momentum," it said. CIMB Research said while there are no changes to our dividend assumptions as we expect JTI to revert to its traditional payout of 30 sen/share, its DDM-based target price has been raised from RM5.10 to RM5.65 after revising downwards its cost of equity assumption from 9% to 8%. Although industry fundamentals remain unexciting, JTI's consistent market share gains and earnings growth are impressive. "We expect it to sustain the growth momentum, thanks to Winston's and Mild Seven's continued strength. This underpins our upgrade of the stock from Underperform to NEUTRAL," it said.
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