CIMB Research raises target price for KESM to RM18.50
25 Sep 2018, 08:40 am
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KUALA LUMPUR (Sept 25): CIMB IB Research has maintained “Hold” on KESM Industries Bhd at RM17.10 with a higher target price of RM18.50 (from RM17.50) and said KESM’s FY7/18 core net profit came in 4% above house estimate but 3% below Bloomberg consensus estimates.

In a note Sept 24, the research house said KESM’s core net profit in FY7/18 fell 11% year-on-year due to lower utilisation following wafer supply issues at its customers and higher depreciation and tax expenses.

“We project stronger earnings in FY19F due to improving wafer supplies but remain concerned that the escalating trade situation may affect demand.

“We cut FY19-20F EPS by 9-13% for higher effective tax and lower utilisation.

“Maintain Hold with a higher RM18.50 target price as we roll over to end-2019F,” it said.

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