May 24, 2011

MSPORTS - OSK maintains 'buy' call on Multi Sports

Stock Name: MSPORTS
Company Name: MULTI SPORTS HOLDINGS LTD
Research House: OSK

OSK Research has maintained a "buy" call on Multi Sports Holdings with a lower fair value of 65 sen from 87 sen previously.

This is after factoring in the lower sales volume due to capacity
constraints, higher raw material costs and a stronger renminbi against the ringgit.

Its first quarter 2011 revenue and net profit at RM325.6 million and RM11.4 million respectively, came in below the full year earnings forecast of OSK.

"Given the below than expected results, we trim our fiscal year 2011/2012 earnings forecast by 14.8 per cent and 16.6 per cent to RM60.7 million and RM73.5 million respectively," it said in a research note today.

The research house also said although the group's results came in below its forecast, the stock is currently trading at an attractive 3.5 times price to earnings ratio.

OSK said the group's new production centre commenced operations in February this year. It expects the group to address its capacity constraint issue progressively. -- Bernama

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