Stock Name: UNISEM
Company Name: UNISEM (M) BHD
Research House: OSK
KUALA LUMPUR: OSK Research said UNISEM (M) BHD []'s annualised 1QFY10 net profit was 26% above market consensus and 30% above its estimates. The research house said on Thursday, May 6 the variance in our forecast arose mainly because the 1QFY10 net profit margin was higher at 13.9% compared to the estimated 10.2%. "As for recommendation, given the limited upside to our fair value and factoring in the dilution effect from the rights issue, we downgrade the stock to Neutral," it said. Its new target price was reduced to RM3.05 from the earlier RM3.53. Unisem posted net profit of RM41.63 million versus a net loss of RM23.1 million a year ago, as it rode on the recovery of the semiconductor sector and expected a further improvement in the current quarter. It also proposed a three-for-10 bonus issue, one-for-four rights issue of 5-year maturity warrants and ESOS which shall not exceed 10% of its issued and paid-up share capital. OSK Research said Unisem's sequential revenue growth of 3.9% is closer to the higher end of the 3%-5% guidance provided by management. The company performed commendably in what is traditionally a weak quarter. "We believe the strong 1Q revenue was mainly due to the demand for consumer electronics being not entirely satisfied in the 4Q09 period. Due to greater economies of scale, earnings jumped 18.6% q-o-q," it said. The research house said that riding on improving sales, Unisem's high operating leverage has enhanced its net profit margin over the last few quarters. Net profit margin has been improving since 4QFY08, with the 1QFY10 net profit margin of 13.9% surpassing that in the pre crisis level.
Company Name: UNISEM (M) BHD
Research House: OSK
KUALA LUMPUR: OSK Research said UNISEM (M) BHD []'s annualised 1QFY10 net profit was 26% above market consensus and 30% above its estimates. The research house said on Thursday, May 6 the variance in our forecast arose mainly because the 1QFY10 net profit margin was higher at 13.9% compared to the estimated 10.2%. "As for recommendation, given the limited upside to our fair value and factoring in the dilution effect from the rights issue, we downgrade the stock to Neutral," it said. Its new target price was reduced to RM3.05 from the earlier RM3.53. Unisem posted net profit of RM41.63 million versus a net loss of RM23.1 million a year ago, as it rode on the recovery of the semiconductor sector and expected a further improvement in the current quarter. It also proposed a three-for-10 bonus issue, one-for-four rights issue of 5-year maturity warrants and ESOS which shall not exceed 10% of its issued and paid-up share capital. OSK Research said Unisem's sequential revenue growth of 3.9% is closer to the higher end of the 3%-5% guidance provided by management. The company performed commendably in what is traditionally a weak quarter. "We believe the strong 1Q revenue was mainly due to the demand for consumer electronics being not entirely satisfied in the 4Q09 period. Due to greater economies of scale, earnings jumped 18.6% q-o-q," it said. The research house said that riding on improving sales, Unisem's high operating leverage has enhanced its net profit margin over the last few quarters. Net profit margin has been improving since 4QFY08, with the 1QFY10 net profit margin of 13.9% surpassing that in the pre crisis level.
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