KUALA LUMPUR (April 15): Kenanga Research has upgraded SLP Resources Bhd to “Outperform” at 92.5 sen with a higher target (TP) price of RM1.22 (from 95 sen) and said it had turned more bullish on SLP.
In a note today, the research house said SLP has been able to raise their products’ average selling prices (ASPs) by 10-15% to match the higher resin costs (up 10-15%).
“The Group also has several new high-margin products in the pipeline, which we think will allow it to grow revenues while preserving margins.
“Resin costs are starting to flatten as they continue to raise ASPs.
Kenanga raised FY21E/FY22E CNP by 9%/3% to RM21.5 million/RM22.3million.
“Hence our TP is raised to RM1.22 (from 95 sen) on higher FY21E EPS of 6.77 sen and PER of 18x (from 14x), which is -0.5SD (vs -1SD previously) from its 5-year mean.
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