KUALA LUMPUR: Hong Leong Investment Bank (HLIB) Research has downgraded Kobay Technology Bhd
to “hold” with a lower target price of RM2.38 from RM4 previously.
The research house said Kobay’s 9MFY23 core net profit of RM29mil was a disappointment due to under delivery by the manufacturing division, which was also impacted by two new projects that are in incubation stage.
“3QFY23 revenue of RM74mil (-10% QoQ, -26% YoY) yielded a core
net profit of RM8m (-23% QoQ, -49% YoY) which brought 9MFY23’s sum to RM29mil (-26% YoY), accounting for 57% of our full-year estimate,” HLIB said.
It said the underperformance was mainly due to under delivery by the manufacturing division, which also impacted by two new projects that are in incubation stage.
“9MFY23 one off items include amortisation of deferred income on government grants, PPE disposal gain and forex loss,” HLIB said.
The research house has cut Kobay’smanufacturing’s sales contribution and this has led to lower FY23-25 EPS by 31%, 25% and 27%, respectively.
