PublicInvestment keeps 'outperform' on Johore Tin, cuts TP to RM1.82

Johore Tin's products are used in a wide range of packaging including biscuits, paints.

KUALA LUMPUR: PublicInvestment research cut its earnings forecast for Johore Tin Bhd on lower sales coupled with an expected delay in the commissioning of its Able Diaires Mexico plant.

However, the research house anticipates a gradual improvement in Johore Tin earnings as the global economy recovers and production ramps up post-movement control order.

It said Johore Tin expects its F&B segment to continue to be profitable despite volatility in raw material prices, uncertainties in the global economy and its recent impact on the Covid-19 pandemic.

The research house maintained its "outperform" recommendation on the stock with a target price of RM1.82, lowered from RM2.11 previously.

"We adjust downwards our forecasts by 9-40% for FY20-22F, to account for lower sales, couple with an expectation of a delay in the commissioning of its 40%-Able Dairies Mexico plant to 2HFY21," it said.

For 1QFY20, Johore Tin posted a net profit of RM4.5mil for 1QFY20, which was 59% lower year-on-year.

The result was below PublicInvestment and consensus expecations at 12% and 13% of their respective full-year estimates.

The weaker result came on the back of 1Q20 revenue of RM108mil as compared to RM141mil in the previous corresponding quarter as sales in its tin manufacturing and F&B segments declined.
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