Stock Name: UNISEM
Company Name: UNISEM (M) BHD
Research House: CIMB
KUALA LUMPUR: Shares and warrants of UNISEM (M) BHD [] fell in early trade on Thursday, April 28 after it was downgraded by OSK Research and CIMB Research.
At 9.20am, Unisem shares fell seven sen to RM1.90 while its warrants shed two sen to 48 sen.
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.
Meanwhile, CIMB Research in a note April 28 said although it expects the remaining quarters to be stronger, Unisem's 1Q11 disappointed, being only 3% of its own and consensus full-year estimates.
It said shortfalls in sales and margins were to blame.
The research house chopped its FY11-13 EPS by 39-47% for lower 1) sales assumptions to reflect lower loading and ringgit firming and 2) margin estimates due to lower operating leverage and higher commodity prices.
'Given the poorer sector outlook and weaker near-term earnings, we apply a wider discount of 40% (30% previously) to Unisem's mid-cycle P/BV of 2.2 times. This, plus our earnings cuts, reduces our target price from RM2.44 to RM2.08.
'We downgrade Unisem from Outperform to NEUTRAL given its poor results, lack of immediate catalysts and outperformance against the market since our upgrade. Switch to Jobstreet,' it said.
Company Name: UNISEM (M) BHD
Research House: CIMB
KUALA LUMPUR: Shares and warrants of UNISEM (M) BHD [] fell in early trade on Thursday, April 28 after it was downgraded by OSK Research and CIMB Research.
At 9.20am, Unisem shares fell seven sen to RM1.90 while its warrants shed two sen to 48 sen.
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.
Meanwhile, CIMB Research in a note April 28 said although it expects the remaining quarters to be stronger, Unisem's 1Q11 disappointed, being only 3% of its own and consensus full-year estimates.
It said shortfalls in sales and margins were to blame.
The research house chopped its FY11-13 EPS by 39-47% for lower 1) sales assumptions to reflect lower loading and ringgit firming and 2) margin estimates due to lower operating leverage and higher commodity prices.
'Given the poorer sector outlook and weaker near-term earnings, we apply a wider discount of 40% (30% previously) to Unisem's mid-cycle P/BV of 2.2 times. This, plus our earnings cuts, reduces our target price from RM2.44 to RM2.08.
'We downgrade Unisem from Outperform to NEUTRAL given its poor results, lack of immediate catalysts and outperformance against the market since our upgrade. Switch to Jobstreet,' it said.
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