PETALING JAYA: SLP Resources Bhd
, which expects flat demand growth in the second quarter, may see some upside moving forward.
According to Kenanga Research, overseas producers of such items may be losing competitiveness on rising production costs that may stand to benefit local players in this industry.
SLP in its recent briefing had guided for cost pressures that would sustain in the second quarter and is stepping up efforts to contain costs by minimising unnecessary overtime shifts among its staff.
Kenanga Research said it was possible that SLP’s overall utilisation may improve to 55%-60% in the second half of the year, as productivity may improve from the seasonally low period in the first quarter of the festive holiday season.
It has maintained its “market perform” call on the company and dividend discounted model derived target price of RM1.09 on SLP.
