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Hup Seng Industries retains Neutral, target price lowered to 92 sen

Hup Seng Industries retains Neutral, target price lowered to 92 sen

HUP Seng Industries Bhd chalked in 2QFY25 revenue of RM84.8m (-7.5% quarter-on-quarter (qoq); +5.7% year-on-year (yoy) and core profit after tax and non-controlling interests (PATANCI) of RM8.6m (-19.4%qoq, -7.1%yoy) which brought 1HFY25 core PATANCI to RM19.3m (17.5%yoy). This came in below our expectations, making up only 38% of our full-year forecast. As 2QFY25 results came in below expectations, we revise our FY25–FY27 earnings forecasts lower by 12%, -13%, and -11%, respectively, to reflect softer export sales assumptions and sustained input cost pressures. Consequently, our target price is reduced to 92 sen (from RM1.04), based on a dividend discount model valuation, assuming a consistent 3.0% dividend growth and a weighted average cost of capital of 9.1%. While dividend yields remain attractive, we expect near-term earnings headwinds to limit upside potential. Maintain Neutral with lower target price of 92 sen. – MBSB Investment Bank Bhd (Aug 12, 2025)
(Calls by analysts tracked by Bloomberg: 0 Buy, 1 Hold, 0 Sell; Consensus target price: RM1.04)
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