Eversendai: Eversendai’s 9MFY14 results came in below ours and that of consensus accounted for only 36.8% and 33.9% of total earnings projection. YTD, top line numbers of RM694.3m declined by 4.5% from RM726.8m in 9MFY13 while core earnings of RM15.0m dropped by 64.0% from RM41.5m in 9MFY13. The significant drop in earnings was mainly due to lower margins as a result of higher cost incurred for its new business ventures. As such, we trimmed our FY14/FY15 earnings estimates by 47.7% and 38.2% respectively following the i) lower-than-expected results for this quarter, ii) the expectation of slow earnings recognition for the next few quarters, and iii) lower margins due to higher cost of new investment. Hence, we downgrade the stock to SELL with our new target price of RM0.59 pegging EPS15 to 11.3x PER.
Posted on: Mon, 01 Dec 2014 01:06:52 +0000
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