Stock Name: OLDTOWNCompany Name: OLDTOWN BERHAD| Research House: JF APEX | Price Call: HOLD | Target Price: 2.23 |
JF Apex Securities Bhd has revised downwards its revenue forecast on Old Town Bhd by 1.56 per cent and 4.61 per cent to RM326.2 million and 363.9 million respectively for the 2012 and 2013
financial years, citing the delay in its Ipoh factory construction as a factor.
In its research note today, JF Apex said the delay would cause the group's Fast Moving Consumer Goods (FMCG) division to lose a potential revenue of RM5.1 million and RM17.6 million in the 2012 and 2013 financial years respectively.
"However, we have upgraded the group's target price to RM2.23 from RM1.69, with a "hold" rating."
Meanwhile, in a separate research note, OSK Research Sdn Bhd said it remained positive of Old Town's prospects, driven by its kiosk outlets and growing overseas business.
"The company intends to launch its first kiosk this month or next month in the high-traffic malls of Suria KLCC and MidValley Megamall.
"This can potentially fuel the company's earnings as the payback period is estimated to be as fast as 12-18 months," the research house said.
OSK Research also expects Old Town's third quarter earnings to be subdued since the period coincided with the Ramadhan month, with earnings expected to amount to between RM8 million and RM9 million.
The research house maintained its "buy" call on the group, with an unchanged fair value of RM2.31. Bernama
