KUALA LUMPUR (Aug 1): Hong Leong IB Research has maintained its “Buy’ rating on Frontken Corp Bhd at RM1.56 with a higher target price (TP) of RM1.77 (from RM1.67) and said Frontken’s 1H19 core net profit of RM33 million (+64% y-o-y) beat expectations as 2H19 is usually stronger.

In a note today, the research house said Frontken declared first interim dividend of 1 sen per share.

“Despite the weaker q-o-q and y-o-y top line, bottom line appeared to be stronger on the back of enhanced efficiency.

“Semiconductor sector may experience a strong recovery in 2H19.

“Similarly for O&G as some 2Q19 billings are carried over into 3Q19. Our upward forecast revisions have led to higher TP of RM1.77, pegged to 25x of FY20 EPS,” it said.