• We are ceasing coverage on NTPM due to a reallocation of internal resources. Our last call was SELL with a MYR0.35 TP.

• NTPM’s 1HFY23 results were below expectations. Notwithstanding the robust topline growth of 23%, net loss of MYR2.4m underperformed our FY23 profit forecast of MYR15m on weaker-than-expected margins, as a result of high production costs and unfavourable FX.

• Our most recent recommendation was SELL, with a DCF-derived TP of MYR0.35. Management expects the operating environment to remain challenging moving forward. However, it observed that cost pressures have shown signs of receding. That said, we believe the volatile commodity prices will continue to pose significant risks to earnings delivery, whilst cost pass-through via price increases may not be straightforward, taking into account the market competition and elevated inflation rates.

Source: RHB Research - 20 Dec 2022