KUALA LUMPUR, Nov 19 (Bernama) -- Bursa Malaysia gave up earlier gains to end mixed today, amid a higher regional market showing, as property, construction, and healthcare counters attracted buying interests, while plantation, banking, and telecommunication stocks saw some profit-taking, an analyst said. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 1.70 points to close at 1,602.34 from yesterday’s close of 1,604.04. The benchmark index, which opened 0.86 of-a-point lower at 1,603.18, moved between 1,601.02 and 1,608.88 during the trading session. However, the broader market was mixed to higher, with gainers leading decliners by 565 to 438 while 502 counters remained unchanged, 961 untraded, and 14 suspended. Turnover narrowed to 2.83 billion units valued at RM2.08 billion versus 2.96 billion units valued at RM2.23 billion yesterday. Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said the benchmark index remained range-bound and it required a dec
Shares of SAM Engineering and Equipment (M) Bhd (KL) fell sharply on Monday, declining by as much as 13% or 71 sen to RM4.64, their lowest level since April 24, 2024. The sharp decline followed the release of weaker-than-expected financial results for the first quarter ended June 30, 2024 (1QFY2025), leading to reduced earnings estimates and target prices from analysts.
Key Takeaways:
Disappointing Financial Performance: SAM Engineering's net profit for 1QFY2025 fell by more than half to RM10.10 million, compared to RM20.53 million in the same quarter last year. The results accounted for just 8% of consensus full-year forecasts, prompting two of the three analysts covering the stock to revise their estimates and lower their target prices. The company's aerospace segment faced setbacks due to delays in new product launches and quality defects in materials procured from suppliers.
Analyst Reactions and Future Outlook: Despite the weak performance, Maybank Investment Bank (Maybank IB) maintained its "buy" rating, albeit with a reduced target price of RM6.15, suggesting that the current issues are temporary and that operations should normalize within the next one to two quarters. Hong Leong Investment Bank (HLIB) also adjusted its target price to RM4.98 from RM6.19, maintaining a "hold" rating due to the stock's current valuation parity with domestic peers and its long-term growth prospects in the aerospace and semiconductor industries.
Market Impact and Broader Context: The decline comes after a strong rally earlier this year, which saw SAM Engineering shares peak in mid-June due to better-than-expected FY2024 earnings. However, concerns over delays and quality issues in the aerospace segment, alongside lower sales in the equipment segment, have weighed heavily on the stock. Despite the recent downturn, the stock remains up approximately 15% year-to-date.
SAM Engineering's management is actively engaging with key clients like Boeing and Airbus to manage delivery plans amid industry challenges. The company’s expansion in Thailand is also showing signs of improvement, with narrowing losses each quarter, providing some optimism for the future. However, near-term volatility is expected as the company navigates these operational challenges.
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