KUALA LUMPUR (Dec 6): TA Securities has maintained its "buy" rating on Able Global Bhd, a manufacturer and trader of food products, with an unchanged target price of RM1.55 per share, based on the sum-of-parts valuation method, as it believes the group’s growth momentum is sustainable, riding on normalised input costs and a diverse pool of suppliers.

In a note on Wednesday, TA Securities said demand for Able Global’s filled milk products is escalating in the US market, where the company made its maiden exports in July 2023, due to inflationary pressure and lower price point product offerings.

The group’s export approval for full cream dairy products to Mexico is still in the pipeline, but it is cautiously optimistic about obtaining the licence early in the second half of calendar year 2024.

"In the absence of clarity of the timeline for the approval, the company has been actively engaging with local consultants in Mexico, amid the submission of necessary documents to the Mexico’s authority after the initial query," TA Securities said.

The research house added that the company’s tin segment, which produces tin cans and other metal packaging, is expected to contribute 15% of the group’s net profit for the financial year ending Dec 31, 2024 (FY2024), based on a price-earnings ratio of eight times.

TA Securities said it was neutral on the company’s post-results analyst briefing, and projected the group’s outlook to remain resilient amid challenging market conditions. The group reported a net profit of RM16.22 million or 5.27 sen per share for the third quarter ended Sept 30, 2023 (3QFY2023), up 94.86%. Revenue rose 27.04% to RM176.76 million.

At the time of writing on Wednesday, shares in Able Global were unchanged from their last trading price of RM1.34 on Tuesday, down 0.7% from the previous day, giving the group a market capitalisation of RM416.03 million. The stock has a 12-month average daily volume of 150,200 shares, and a dividend yield of 3.5%.