6 days ago
- Business
- Malaysian Reserve
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)
