Kenanga Research said it was not making changes to its earnings forecasts.
PETALING JAYA: SKP Resources Bhd
expects a sales value of RM100mil in the first year and the potential of the figure doubling in the second year.
According to RHB Research, there are talks ongoing with several potential new customers and SKP is confident of onboarding at least one by end-2024.
The research house visited the company recently and was positive about the near-term sector earnings prospectus and learnt that the group’s customer diversification is gathering pace.
“We continue to like SKP as a proxy to capitalise on the recovery of global demand for consumer electronics and opportunities arising from the trade war diversion.
“Maintain ‘buy’ with a target price of RM1.31 a share,” Kenanga Research said in a note to clients yesterday.
The research firm expects the financial year 2025 (FY25) to reflect order recovery by customers after SKP posted a 33% decline in FY24 net profit on the back of a dip in sales volumes.
“We expect 1Q25 to get off to a good start with an estimated 20% year-on-year top line growth and anticipate the momentum to accelerate further into 2Q25 for the key customers to capture the year-end festive demand.”
The group is also kick-starting a new revenue stream.“We understand that SKP is scheduled to start the production lines of the two new customers it secured earlier by October.
“Whilst the earnings contribution may be immaterial in FY25, a smooth ramp-up of the US-based customer could lead to a more significant order volume in FY26.
“We were shown the preparation work and floor space allocated to this customer in its Plant 5 during the visit,” added the research house.
However, Kenanga Research said it was not making changes to its earnings forecasts and target price of RM1.31, which was based on 15 times 2025 price-to-earnings.
