KUALA LUMPUR (Aug 25): Karex Bhd's share price fell after rising in morning trade today following the condom manufacturer's announcement yesterday of a fourth-quarter profit and planned glove manufacturing venture.
Karex reported that its net profit for the fourth quarter ended June 30, 2020 (4QFY20) stood at RM1.43 million versus a net loss at RM1.01 million a year earlier.
At 9.13am today, Karex's share price was four sen or 3.74% lower at RM1.03 after rising to RM1.11 earlier.
The stock saw some 27 million shares transacted as at 9.13am. At RM1.03, Karex had a market value of RM1.07 billion.
Yesterday, Karex said it registered a net profit for 4QFY20 as revenue rose to RM91.09 million from RM87.66 million a year earlier.
For the full year, Karex said cumulative net profit, however, fell to RM228,000 from RM2.53 million a year earlier.
Today, Hong Leong Investment Bank Bhd analyst Farah Diyana Kamaludin wrote in a note that Karex's results came in above the investment bank's and consensus expectations.
"Karex is optimistic about a better FY21 supported by increasing ASPs (average selling prices), mostly thanks to a reduction in condom suppliers due to Covid-19. The new glove manufacturing facility would be positive for Karex. However, it is still too early to make any assumptions about contributions.
"We increase our FY21-22 earnings [forecasts] by 70%/33% [respectively amid a low base] to reflect a higher expected revenue contribution and other income. Post earnings adjustments, our TP (target price) has been increased to RM1.20 from 59 sen," Farah Diyana said.