April 28, 2011

UNISEM - OSK Research has SELL on Unisem, FV RM1.63

Stock Name: UNISEM
Company Name: UNISEM (M) BHD
Research House: OSK

KUALA LUMPUR: OSK Research said Unisem's 1QFY11 core earnings of RM5.1m fell short of both consensus and its estimates at 2.7% and 2.5% of the projections respectively.

It said on Thursday, April 28 this was due to an industry-wide inventory correction and continued appreciation of RM against USD.

'Changing our valuation basis from P/NTA to PER to better reflect its recurrent earnings, our Fair Value now stands at RM1.63, pegged at 8x FY11 PER.

'In view of the recent share price run up, which we deem unjustified as the potential setbacks from inventory adjustment and RM appreciation will cast a dark cloud over its near-term earnings visibility, we downgrade our call to a SELL,' it said.

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