PETALING JAYA: AmInvestment Research has maintained its “buy” call on fully integrated poultry operator Leong Hup International Bhd (LHI) with a lower fair value of RM1.02 a share as opposed to RM1.04 previously.
The research unit said in its latest report that its valuation was pegged to a price earnings (P/E) of 18 times the forecast financial year 2020 (FY20) earnings per share (EPS).
“LHI’s FY19 core net profit of RM167.2mil (after excluding an impairment loss on receivables of RM16.6mil) was in line with our and consensus’ earnings estimates, accounting for 97.1% and 96.6% of full-year forecasts, respectively, ” it said in a research note.
However, AmInvest Research has trimmed its earnings forecast for FY20 and FY21 by 2.4% and 3.4%, as it expects soft selling prices to persist in the near term. “We have a FY22 earnings forecast of RM243.8mil, ” it said.
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