KUALA LUMPUR (Feb 25): D&O Green Technologies Bhd shares rose to a record high after the group delivered all-time high earnings.

D&O, which is among the top 10 gainers, rose as much as 46 sen or 13.81% to a high of RM3.79 today.

At 11.04am, the counter pared some gains at RM3.75, still up 42 sen or 12.61%.

The group announced yesterday that its net profit surged 119% to RM30.32 million for the fourth quarter ended Dec 31, 2020, from RM13.85 million in the previous year’s corresponding quarter, benefiting from increased demand and recovery in the automotive industry.

Its revenue for the quarter also grew 39% to RM209.57 million from RM150.47 million a year earlier.

For the full year, its net profit rose 42% to RM49.65 million from RM34.87 million in the preceding year, while revenue climbed 14% to RM575.78 million from RM504.31 million.

Analysts have raised D&O earnings forecasts after its earnings beat their expectations.

Public Invest Research’s analyst Chong Hoe Leong said in a note today D&O’s FY20 core earnings surpassed his and consensus expectations, coming in at 134% of house and 125% of street expectations, respectively.

He said the sterling results were mainly driven by strong post-pandemic global auto sales recovery coupled with higher adoption of automotive LED for exterior lighting and infotainment.

“In view of its increasing global market share especially in the exterior LED segment and its leading technology position in the smart RGB LED, we bump up our FY21-23 earnings forecasts by 50%-100%,” he said.

Chong, who maintained an "outperform" call on the stock, also raised D&O's target price to RM5.09 (from RM1.88), after rolling forward its valuation base year to FY22, based on a higher price to earnings ratio of 45 times (from 40 times).

Kenanga Research’s analyst Samuel Tan also said in a note today the group’s numbers exceeded his/consensus full-year estimates by 20%/34%.

“We expect product demand to remain elevated in FY21, fuelled by the continuation of strong car sales and increased adoption of interior and exterior LEDs,” he said.

He raised D&O FY21 profit after tax and minority interests (PATAMI) by 23% to RM100.5 million and introduced FY22 PATAMI of RM121.9 million. The forecast represented growth of 102% and 21%, respectively.

Tan, who maintained "outperform" on the stock, raised D&O target price to RM4.20 from RM3.40, based on 48 times FY21 price earnings ratio to reflect improving prospects ahead.

“Being a renowned brand name in full range automotive LED, we believe D&O is a prime proxy to the potential boom in the automotive market,” he added.