KUALA LUMPUR (Jan 28): AllianceDBS Research Sdn Bhd raised its Perusahaan Sadur Timah Malaysia (Perstima) Bhd share target price to RM5.30 from RM5 upon rolling forward the valuation base to end calendar year 2019.

AllianceDBS analyst Cheah King Yoong said in a note today AllianceDBS maintained its "hold" call for shares of tinplate producer Perstima.

"Given the recovery of its share price in 2H18, we believe that the stock is fairly valued this this juncture," Cheah said. At Bursa Malaysia today, Perstima shares rose four sen to RM5 with 34,900 units traded.

"We are maintaining our earnings forecasts for Perstima," Cheah said. AllianceDBS's note on Perstima today followed the announcement of Perstima's third quarter results on Friday (Jan 25).

Perstima said net profit rose to RM10.13 million in the third quarter ended Dec 31, 2018 (3QFY19) from RM3.4 million a year earlier. Cumulative 9MFY19 net profit was higher at RM34.51 million from RM9.75 million a year earlier, according to the company.

Today, Cheah said: "The strong earnings growth compared with the corresponding period last year was driven mainly by recovery in its gross profit margin (3QFY19: 6.4% vs 3QFY18: 3.4%)."

"Although margin recovery implies that competition from tinplate imports from Korea and China to Malaysia may be subsiding, the expiration of anti-dumping duties on Nov 15, 2018 could re-intensify the competition going forward," he said.