CIMB Securities Research has revised down its earnings per share forecasts for FY26 to FY28 by 9% to 12%.
PETALING JAYA: Despite market headwinds, analysts are confident that SKP Resources Bhd
will be able to remain solid.
RHB Investment Bank Bhd said demand from a certain customer was largely stable notwithstanding the market turbulence stemming from US tariff policies.
“This should provide immediate-term earnings visibility. SKP also secured another new customer following the two on-boarded last year, this bodes well for the group to reduce single customer concentration risks and fill up capacity at its new plant,” it said in a report.
According to the research house, SKP is in talks with more potential customers after having received more enquiries following the US government’s tariff move, which might have compelled more brand-owners to diversify their production sources.
On its earnings, RHB Investment Bank said the group’s first quarter of 2026 results were below expectations, as its net profit of RM27mil accounted for 19% to 20% of its and consensus’ full-year forecasts.
“The negative deviation could be attributed to slower-than-expected sales traction on the back of global trade tensions. We maintain ‘buy’ with a lower target price (TP) of RM1.13 from RM1.25,” it said.
Meanwhile, CIMB Securities Research has revised down its earnings per share forecasts for FY26 to FY28 by 9% to 12%, due to slow margin recovery from elevated startup costs for new customer programmes, higher depreciation expenses, and weaker sales from its key customer.
“We project sales from its key customer to decline 5% to 6%, reflecting potential demand risks from the US reciprocal tariff.
“Our channel checks indicate that the group’s key customer is likely to absorb the tariff, this could translate into higher end-product prices, which may in turn weigh on overall production volumes,” it noted.
The research house added that 15% to 20% of SKP’s revenue is derived from products bought by the United States.
However, diversification is gaining traction as new customers contributed 4% of revenue in 1Q26, and the group is in the process of onboarding another customer for its new Johor Baru plant, according to the research house.
“We continue to see SKP as a key beneficiary of trade diversion strategies away from North Asia. We maintain ‘buy’ with a lower TP of RM1.03.”
Kenanga Research is also positive on SKP, pricing it at RM1.24 a share with an “outperform” call on the stock.
It said its quarterly results were in line with their expectations, given that the first quarter is usually weaker.
