Poh Huat’s 2QFY22 headline net profit jumped by 81.7% YoY to RM23.1m, on the back of stronger sales and better economies of scale as the group ramped up its production to clear order backlogs. After excluding a forex gain of RM2.2m, Poh Huat’s core net profit came in at RM20.8m. Cumulative 1HFY22 core net profit of RM35.9m was above our and street’s expectations, accounting for 69% and 66% respectively. The discrepancy in our numbers was mainly due to the stronger-than-expected profit margins. We are adjusting our FY22-24F forecast upwards by 4-12% as we raise our margin assumptions on stronger production efficiency. We remain optimistic on Poh Huat’s future outlook, as we expect demand to remain robust due to trade diversions, further supported by the strengthening of the USD. As we roll over our valuation base year to CY23F EPS, our TP is subsequently raised to RM1.92 (previously RM1.65) based on 8x PER. On a side note, Poh Huat declared a first interim dividend of 2sen. Maintain Outperform.
Source: PublicInvest Research - 29 Jun 2022
Created by PublicInvest | Aug 08, 2022