Hup Seng Industries Bhd saw some revival in its share price movement to close at RM1.16 on Aug 30. Hup Seng was trading at a year low of 68 sen last October but rose to a high of RM1.33 on July 5. It has been an impressive for the counter, which rose some 65.7% in the past year.
The confectionary maker reported a net profit of RM9 million, up 4% year-on-year in 2QFY24, which lifted its 1HFY24 performance to RM23 million, rising 25% YoY. The rise in net profit was primarily driven by lower input costs, meanwhile revenue saw a slight YoY increase of 3.5%, supported by a modest uptick in sales volume.
This is mainly contributed by export sales which grew by 8%, driven by its market in Myanmar, Indonesia and Singapore, while domestic sales registered a marginal 2% increase.
According to consensus expectations, Hup Seng is forecasted to post net earnings of RM47.2 million for FY Dec 2024 and RM52.2 million for FY Dec 2025. This implies prospective PERs of 19.3x this year and 17.5x next year, respectively.
Its revenue declined by 14% quarter-on-quarter, from RM93.6 million to RM80.2 million while net profit fell by 35%. This was mainly due to seasonal factors and a slowdown in sales in both the domestic market and the Asian region, which decreased by 15% and 11% respectively.
The sales number were negatively impacted by its significant reliance on domestic sales, coupled with conservative consumer spending impact from prior sale price adjustments.
Based on consensus dividend per share estimates of 4.1 sen in FY24 and 4.6 sen in FY25, the stock currently offers dividend yields of 3.6% and 4%, respectively. Analysts continue to be wary of cautious consumer spending.
Nevertheless, Hup Seng’s strategy of enhancing its brand presence and strengthening both domestic and export markets is expected to support its competitiveness and potentially mitigate some of these challenges.
With the share price havig appreciated substantially over the past 12 months, it will be challenging for it to go up further given that a slowdown in sales growth is anticipated.
Created by zaclim | Sep 04, 2024
Maybulk Bhd reported higher net loss in 2QFY24 but signs point to positive share price momentum in the near term. Is it time to start buying?
Created by zaclim | Sep 02, 2024
Ecomate Holdings Bhd managed to touch its year high of 90 sen recently, a level last seen in May. Could this signal to a continued surge upwards?
Created by zaclim | Aug 29, 2024
AirAsia X Bhd is still not out of the woods but is seeing a rebound after its share price rose to a high of RM1.35 recently. Can it continue to fly higher?
Created by zaclim | Aug 28, 2024
Cuscapi Bhd has gained 50% in terms of value year-to-date and signs indicate that the good run still has legs.
Created by zaclim | Aug 27, 2024
After a turnaround in its financials, Pesona Metro Holdings Bhd has been attracting investors’ interest especially after bagging 4 contracts in a year. Will its good run in share price be sustainable?
Created by zaclim | Aug 26, 2024
Able Global Bhd has been surging in recent weeks although still shy of its 52-week high seen in June. Will the counter be able to reach its high?
Created by zaclim | Aug 26, 2024
Johor Plantations Group Bhd may not have performed as well as other listings this year but signs indicate the counter might trend higher
Created by zaclim | Aug 22, 2024
AEON Co. (M) Bhd is experiencing significant growth, with its stock hitting a 52-week high of RM1.54 on August 21, a 30% surge year-to-date. Can it continue to draw investors’ interest?
Created by zaclim | Aug 21, 2024
Capital A Bhd may be racing against time to get itself out of the PN17 status but its share price has been moving upwards. Can it maintain its positive run?