Affin Hwang maintains ‘buy’ on QL Resources, TP at RM9.30

KUALA LUMPUR: Affin HWang Capital research maintained its buy call on QL RESOURCES BHD with a target price of RM9.30 as its core earnings in 9MFY20 came in line with expectations.

According to the research house, the earnings of RM196.4mil was 13.2% higher year-on-year and met 78% of its and consensus full-year estimates

QL’s livestock segment saw better contribution from its regional and Sabah operations although palm oil activities were subdued on a lower CPO average selling price.

The group’s revenue came in 17% higher year-on-year at RM2.72bil on higher contribution from the marine products manufacturing (MPM) and integrated livestock farming (ILF) segments, slightly offset by palm oil activities.

“Looking ahead, we expect the group’s key MPM and ILF businesses to continue to flourish as demand for surimi-based products (MPM) and affordable sources of protein such as eggs and broiler (ILF) is expected to remain resilient in tandem with the growing population and rising average consumption,” said QL.

It added that the Family Mart operations currently parked under ILF will likely be segmented out in 4QFY20, which should provide further visibility to investors.

“We expect CVS’ contribution to group earnings to be sizable going forward,” it said.

Source: TheStar