KUALA LUMPUR (Jan 16): Shares of Johore Tin Bhd rose as much as 12.3% in early trade today, as investors became enthusiastic about the profits the company would potentially make.

The stock hit an intraday high of RM1.37. At 3.38pm, the stock's share price was up 11 sen or 9.02% at RM1.33, with 5.57 million shares done, emerging among the top gainers. Its market capitalisation stood at RM422.24 million.

Its 200-day average trading volume stood at 884,441 shares.

TA Securities yesterday released a note on Johore Tin's prospects, raising its target price on the counter to RM1.75 with a "buy" call.

This is premised upon the downward price trend of the company's main raw material, skimmed milk powder, which has dropped 37% year-on-year this month, and is expected to help enhance Johore Tin's profit margins in its food and beverage (F&B) business division.

Growing demand for vegetable oil packaging products is also expected to support top-line growth for its tin manufacturing segment.

Additionally, the strengthening of the ringgit is set to benefit Johore Tin as 70% of its revenues are generated through the export sales of tin manufacturing and F&B products, while approximately 80% of its costs of goods sold are imported raw materials.

"We raise our financial year ending Dec 31, 2017 (FY17) earnings projections by 8% to account for lower-than-expected skimmed milk price and normalising tin manufacturing margin," said TA Securities.

The research house also raised its FY18 and FY19 earnings forecasts by 2.6% and 6.9% respectively, premised on assumptions that the ringgit will average at US$4.10 then, and the commissioning of its new plant in Mexico in the fourth quarter of FY18.

For the first nine months ended Sept 30, 2017 (3QFY17), the tin packaging and dairy products manufacturer turned in a net profit of RM25.28 million on revenue of RM358.9 million.