Leong Hup perks up after Credit Suisse rates it outperform

Leong Hup International Bhd's corporate office. Credit Suisse initiated coverage with an outperform call and a target price of RM1.

KUALA LUMPUR: Poultry company Leong Hup International Bhd saw its shares climb to a high of 87 sen on Tuesday after Credit Suisse initiated coverage with an outperform call and a target price of RM1.

At 5pm, the shares were up 3.5 sen to 86 sen with 7.62 million shares. This was the highest since Aug 6.

At the current price, it is trading at a forward price-to-earnings of 15.36 times.

Since it was listed on May 16, the share price of the integrated producers of poultry, egg and livestock feed had come under pressure and fell below its offer price of RM1.10.

A weaker set of earnings in the second quarter pushed the share price to a low of about 70 sen at end-August.

It had cautioned investors about the weak earnings following the fall in broiler day-old-chicks (DOC) prices but it expected the third quarter to show an improvement.

It reported a 75.5% fall in net profit to RM16.08mil in the second quarter ended June 30,2019. Its revenue however rose by 3.8% to RM1.48bil from RM1.42bil a year ago.

RHB Research, Hong Leong Investment Research, TA Securities Research, AmInvestment Research and Maybank Investment Bank Research all have buy calls on Leong Hup International with prices ranging from RM1.08 to RM1.36.