KUALA LUMPUR: Affin Hwang has raised its target price for IOI Corp Bhd
to RM4.06 from RM3.92 but maintained its 2018-20E core earnings per share forecasts.
Following the announcement of IOI's results, the research house said the plantation company's 9MFY18 core net profit came in within its and consensus expectations.
"After excluding forex and other one-off items, 9MFY18 core net profit increased by 3.9% yoy to RM896.9m. This came in within our and the street’s expectations, accounting for 79.3% and 79% of our and consensus FY18 forecasts."
It added that IOI's 9MFY18 revenue declined 3.6% on year to RM6.9bil. Revenue contribution from the plantation division was higher but offset by a decline in the contribution from the resource-based manufacturing division.
It said the average selling price of CPO for the period was lower at RM2.593 per metric tonne while CPO production increased 14.1% on year to 590,300 metric tonnes.
"We leave our FY18-20E core EPS forecasts unchanged as there were no major surprises to IOI Corp’s 9MFY18 results but raise our target price to RM4.06 (from RM3.92 previously).
"This is after rolling over our valuation base year to 2019E and on an unchanged PE multiple of 22x. We maintain our SELL rating on the stock, based on lofty valuations."
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