KUALA LUMPUR (July 3): Shares in electronic manufacturing services (EMS) provider SKP Resources Bhd continued its losing streak, shedding as much as 11.47% or 12.5 sen to 96.5 sen during the morning trade session on Monday (July 3).

At noon break, its shares pared losses to 99 sen, still down 10 sen or 9.17%, before closing at the same price. This slotted the counter among the bourse’s top losers on Monday.

At 99 sen, the group has a market capitalisation of RM1.55 billion. Year-to-date, the counter has fallen 38.51%.

The counter saw 30.61 million shares change hands, over 17 times its three-month average volume of 1.73 million shares.   

At the time of writing, it remains unclear as to what is driving the share price movement.

It is worth noting that over the past two months, Kumpulan Wang Persaraan (Diperbadankan) (KWAP) had increased its stake in SKP Resources by 0.22% or 3.43 million shares to 8.37% or 134.25 million shares.

Meanwhile, the Employees Provident Fund (EPF) has upped its stake in the group by 0.92% or 14.38 million shares to 7.88% or 123.09 million shares.

SKP Resources' single largest shareholder is the group’s executive chairman cum managing director Datuk Gan Kim Huat with a 4.54% direct stake and another 35.69% via his vehicles Beyond Imagination Sdn Bhd, Graceful Assessment Sdn Bhd, Zenith Highlight Sdn Bhd, as well as his spouse and children.

For the financial year ended March 31, 2023 (FY2023), SKP Resources’ net profit fell 16.67% to RM144.49 million from RM173.4 million a year earlier due to weaker consumption spending, despite a 9.06% rise in revenue to RM2.53 billion from RM2.32 billion previously.

The group’s earnings were dragged by higher cost of sales to RM2.21 billion from RM2 billion previously as well as a rise in operating expenses of RM152.11 million versus RM125.42 million previously. 

In a note dated May 31, PublicInvest Research analyst Ching Weng Jin retained his “outperform” call on SKP Resources with a lower target price of RM1.34 (RM1.69 previously), on the back of the group’s weaker-than-expected FY2023 earnings.

Ching said the variance was due to more pronounced subdued global demand on the back of monetary tightening, while the group’s costs remained elevated as it continued to maintain its full workforce in anticipation of a recovery in demand.

On the back of the FY2023 earnings miss, Ching cut his net profit forecast for the group by 29.5% on average to RM122.3 million for FY2024 and RM144.8 million for and FY2025, premised on a dimmer view of global consumption spending.