Wednesday, August 29, 2012

Wah Seong Corporation: Maintain Buy - Below Expectations, TP Lowered By 8%

  • Reiterate BUY but TP lowered to MYR2.20. Despite a stronger QoQ net profit in 2Q12 (+13%), 1H12 results (-46% YoY) were still sub-par, impaired by higher operating expenses. As such, we lower our FY12-14 earnings forecasts by 6%/5%/4% and target price by 8% on an unchanged 13x FY13 PER.
  • Despite the earnings set-back, the prospects of its pipe-coating business remain positive as it capitalises on higher E&P spending locally and abroad.
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Source: Maybank Research - 29 August 2012

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