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QL Resources in for better second half on higher product prices
2021-12-01 00:00:00.0     星报-商业     原网页

       

       PETALING JAYA: Integrated agro-based group QL Resources Bhd is likely to have a better second half for the financial year ending March 31, 2022 (FY22), banking on improved sales of its products.

       Kenanga Research said in a report that the second half looks to be improving as the group’s earnings are expected to be anchored by its marine products manufacturing (MPM) segment, supported by a stable fish-cycle and persistently robust sales momentum, especially from its frozen surimi-based products.

       “MPM activities are historically lower in the fourth quarter of the financial year due to the monsoon season but we expect improvements ahead provided there is no further resurgence of the pandemic,” it told clients.

       QL Resources, which owns FamilyMart Malaysia, saw a recent financial performance that came in below the research house’s expectations.

       Like Kenanga, it said it was expecting QL Resources’ earnings to improve going forward following the reopening of economic activities, which should translate to an improvement in livestock average selling prices and better footfall for its FamilyMart operations.

       It said the group’s first-half FY22 profit after tax of RM88mil accounted for 31% and 33% of its and market estimates, respectively, as low fish landing cycles continued into the second quarter of FY22, coupled with high feed costs.

       “While revenue improved 21% to RM2.47bil, earnings continued to be eroded due to continuing elevated input costs and continuation of a low fish landing cycle.”

       Public Investment Bank in its report on QL Resources said it was expecting a recovery in FamilyMart’s sales as footfall normalises following an easing in movement restrictions.

       “QL Resources is on track to achieve its target of 300 stores by FY22, having opened 267 FamilyMart stores to date,” it noted.

       While raw material prices remain elevated, we are expecting margins to recover, going forward, said Public Invest, adding that this was mainly premised on a recovery in egg prices in Peninsular Malaysia and Indonesia, given the recovery in consumption especially at hotels, restaurants and cafes.

       Like Kenanga, it said it was expecting QL Resources’ earnings to improve going forward following the reopening of economic activities, which should translate to an improvement in livestock average selling prices and better footfall for its FamilyMart operations.

       “All told, we upgrade our call on QL Resources to ‘outperform’,” it said.

       Kenanga said while valuation appeared rich at this level, it believed it was justified, premised on QL Resources’ resiliency and robust earnings growth potential from diversified revenue streams.

       It has also upgraded QL Resources to an “outperform”, citing worse-than-expected MPM sales as a risk to its call.

       At last look, shares in QL Resources were at RM4.53, valuing the whole company at over RM11bil.

       


标签:综合
关键词: expecting     FamilyMart     earnings     Kenanga Research     Resources     footfall     improved sales    
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