March 14, 2011

NTPM - OSK Research maintains Neutral on NTPM, TP 52c

Stock Name: NTPM
Company Name: NTPM HOLDINGS BHD
Research House: OSK

KUALA LUMPUR: OSK Research is maintaining its Neutral stance on NTPM and keeping its Target Price at 52 sen, based on 10x FY12 EPS.

OSK Research said NTPM's 9MFY11 revenue, which grew 9.0% y-o-y to RM315.8m while net profit fell 10.4% y-o-y to RM40.5m, were within its expectation.

The higher revenue was mainly driven by higher sales (mainly of tissue products) as the higher selling price of 5%-10% had only a 1-month impact on the current quarter.'' EBIT margin narrowed from 20.3% in 9MFY10 to 17.3% in 9MFY11.

'Despite rising raw material prices, we see margins hovering at the current level as NTPM revised upwards selling prices by 5%-10% in Nov 2010,' it said.

OSK Research said it maintained our FY11 and FY12 earnings forecasts at RM50.5m and RM58.9m respectively. Our TP is kept at RM0.52, based on 10x FY12 EPS. Maintain NEUTRAL.

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