KUALA LUMPUR (May 30): Shares in D&O Green Technologies Bhd fell more than 10% to its lowest level since May 2022, after its net profit tumbled 97.17% to RM863,000 for the first quarter ended March 31, 2023 (1QFY2023), from RM30.45 million a year earlier.

At 10.01am, D&O fell 10.03% or 39 sen to RM3.50, with 2.73 million shares done. The stock had earlier slipped to a low of RM3.49.

D&O’s revenue declined 11.13% to RM214.72 million, from RM241.6 million in 1QFY2022, primarily as a result of the lower sales of China-manufactured cars, and an overhang of car inventory in China.

In a note on Tuesday (May 30), PublicInvest Research maintained its outperform rating on D&O, with a lower target price of RM4.37 based on 35X FY2024 EPS.

The research house said the unexpectedly weak results made up only 0.6% of its and consensus full-year expectations.

“Despite the setback, management aims to achieve revenue growth this year. China’s April passenger car sales surged 55% year-on-year, coupled with the recent price hike by Tesla, indicating that the operating environment is finally becoming supplier-friendly and the cycle of declining earnings trend appears to be coming to an end.

“Nevertheless, we cut our FY2023-2025F earnings forecast by 21%-50%, after lowering our margin assumption,” it said.