MORNING CALL:11/8/23

Hup Seng Industries is our stock in focus this Friday morning

Transcript

00:00 Hap Seng Industries is our stock in focus this Friday morning.

00:05 MIDF Research keeping its buy rating on the stock, though it raised its target price to

00:10 90 cent from 88 cent apiece.

00:13 The counter last traded at 68.5 cent.

00:16 The key investment highlights, first half FY23 core PAT of 18.4 million ringgit came

00:22 in within MIDF's full year FY23 estimates at 52% and exceeded consensus forecast at 59%.

00:31 2Q saw a 10.5% rise in revenue and better export sales which increased by 9%.

00:37 This pushed quarterly core PAT by more than double to 8.8 million ringgit.

00:42 Overall, first half growth's profit margin improved up by 6.1 percentage points year-on-year to 28.6%.

00:49 This was thanks to higher selling prices along with a reduction in major input materials,

00:55 MIDF making no changes to its forecast, considering the earnings are within its estimation.

01:01 Moving forward, the research house expects a normalised profit margin, supported by the

01:05 stabilisation of global commodity prices for wheat and CPO.

01:10 While sugar prices have remained elevated, MIDF said it has observed a recovery from

01:15 the two-year peak level.

01:16 So what does the street say?

01:18 According to Bloomberg data, only two research houses cover Hap Seng, the other one being

01:23 BIMB Securities with a buy recommendation and target price of 86 cen.

01:28 So that's two buys, average target price 88 cen.

01:32 Hap Seng ended trading yesterday at 68.5 cen, so that's a potential upside of about 25.5%.

01:38 Thanks for watching.