KUALA LUMPUR: Shares in Kuala Lumpur Kepong rose in early trade Wednesday after it reported better-than-expected fourth quarter results.

The plantation group added 0.99%, or 20 sen to RM20.46. It is currently the second top gainer on Bursa Malaysia. Year-to-date, the counter has fallen some 14%.

KLK’s net profit surged almost 200% to RM625.80mil for its fourth quarter of the financial year ended Sept 30, 2021 (4Q21) from RM208.82mil a year ago.

Its revenue in 4Q21 grew to RM5.93bil from RM4bil a year earlier.

For FY21, KLK’s net profit surged to RM2.26bil from RM772.60mil in FY20, while revenue grew to RM19.92bil from RM15.60bil.

“KLK’s FY21 net earnings of RM2.2bil came in above expectations, making up 139.7% of our expectation and 114.7% of consensus full year estimates,” MIDF Research said.

The research house has revised upwards its FY23 earnings forecast to RM1043.7mil due to better performance for its upstream segment.

“For FY22F however, the upward revision in base earnings is more than offset by the impact of the Cukai Makmur, resulting in a lower net profit forecast of RM1146mil,” it said.

“We revised our target price to RM28.37 (from RM29.71). This is premised on pegging FY22F EPS of 106.3sen against forward PER of 26.7x. Our target PER is at one standard deviation above KLK’s two-year historical average,” MIDF said.

It has maintained its “buy” recommendation on KLK with a revised target price of RM28.37.



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