Pos Malaysia tumbles on poor results - Business News | The Star Online

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Pos Malaysia tumbles on poor results

PETALING JAYA: Shares of Pos Malaysia Bhd plunged 12.7% yesterday to RM4.62 after dismal third quarter results and a weak earnings outlook prompted analysts to downgrade the stock. AmResearch analyst Wong Joe Vuei wrote in his report that Pos earnings in the quarter and the year-to-date were below expectations, accounting for only 59% of his full year estimate and 62% of consensus estimates. We revise our FY2014-FY2016 forecast earnings downwards by 8%-10%, as we adjust our earnings before interest taxes depreciation and amortisation to account for the higher operating expense. We also raise our effective tax rate assumption from 25% to 28%, Wong said. Wong kept his hold call on the stock with a target fair value of RM5.80. For the third quarter ended Dec 31, 2013, Pos Malaysias net profit declined to RM22.83mil from RM51.6mil in the same period previously. Revenue, however, rose to RM329.74mil from RM313.26mil previously. Kenanga Research in its report also downgraded its FY2014 and FY2015 forecast net profits by 5%, taking into account these higher operating costs. The research house also reduced its target price from RM5.39 to RM5.13 based on an unchanged 15 times 2014 revised earnings per share of 34.2 sen. Hong Leong Research retained its hold rating on the stock with a lowered target price to RM5 from RM5.53 based on an unchanged 16 times FY2015 price to earnings ratio. According to Bloomberg statistics, most analysts had a hold call on the stock with a consensus average 12-month price target of RM5.36. On its outlook moving forward, Kenanga Research sees Pos growing its profitable courier and logistics businesses which will have strong synergies from its 32% owner DRB-Hicom and the companys unit Kuala Lumpur Airport Services that will create an efficient logitics management service. Hong Leong said forward positives for Pos included strong growth opportunities on synergies with its major shareholder DRB-Hicom and the newly-acquired Konsortium Logistics. On the flipside, however, Hong Leong noted that negatives that could weigh Pos were huge staff numbers, its operation in a highly regulated industry, and with fortunes tied to the price of crude oil. By the end of the trading day, both its shares and call warrants topped the losers list with its warrants Pos-CL declining 30 sen to 34 sen and Pos-CM losing 20.5 sen to 14 sen.

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2/21/2014 8:31 AM