KUALA LUMPUR (Sept 20): Hong Leong IB Research has initiated coverage on Leong Hup International Bhd (LHI) with a “Buy” rating at 80.5 sen and target price of RM1.10 and said LHI is one of the largest fully integrated producers of poultry, eggs and livestock feeds in Southeast Asia (SEA) region.

In a note today, the research house said having reflected the weak livestock prices in 2Q19, it projects core net profit to decline by 11.6% to RM194.2 million in FY19.

“We forecast FY20-21 core net profit to increase by 15.1-15.2% to RM233.5 million and RM257.5 million, underpinned by higher livestock and feedmill sales volume (arising from capacity expansion).

“We initiate coverage on LHI with a Buy rating and TP of RM1.10 based on 18x FY20 EPS of 6.1 sen,” it said.