KUALA LUMPUR (Aug 30): Hong Leong IB (HLIB) Research has maintained its “hold” rating on QL Resources Bhd at RM5.07 with a higher target price (TP) of RM5.46 (from RM3.73) and said QL’s 1QFY23 core profit after tax and minority interests (PATAMI) of RM82.4 million (q-o-q: + 19%; y-o-y: 95%) came in above house (36%) and consensus (31%) estimates.

In a note on Tuesday (Aug 30), the research house said that save for the palm oil and clean energy (POCE) division, sales across the board picked up steadily with the full resumption of economic activities.

“We take comfort on marine products manufacturing (MPM) recovery after the drag registered in 4QFY22.

“Note that the MPM segment has historically dubbed as the earnings driver which contributes about 60-63% of the group's pre-tax profit,” it said.

HLIB revised its FY23/24 earnings projections for QL upwards by +15%/+10% and introduced FY25 figures.

“After earnings adjustment, our TP increases from RM4.73 to RM5.46 based on an unchanged 50 times P/E of FY23 EPS.

“We opine QL’s current risk reward profile to be fair while its rich valuation is justified by its status as a key consumer staple,” it said.