KUALA LUMPUR (Aug 21): Shares of YSP Southeast Asia Holding Bhd (KL: YSPSAH) fell on Wednesday to their lowest in nearly three months as investors reacted to a sharp drop in quarterly profits.

YSP fell as much as 45 sen or 16% to RM2.32, triggering a temporary suspension in intraday short selling of the stock for the rest of the day. The stock closed at RM2.42, its lowest since May 13, 2024, after close to 1.5 million shares changed hands, more than 18 times the 200-day moving average.

No institutional analyst covers the stock.  

The sharp decline comes after the pharmaceutical company reported its net profit was 74.1% lower in the second quarter ended June 30, 2024 (2QFY2024) at RM3.2 million versus RM12.38 million a year ago. Revenue for the quarter was down 4.4% to RM76.14 million from RM79.63 million in 2QFY2023.

YSP’s weak 2QFY2024 performance was mainly due to an unrealised currency loss of RM3.3 million in the current quarter versus a gain of RM7.7 million in 2QFY2023 due to the strengthening US dollar.

For the first half of 2024, YSP’s net profit fell 26.6% year-on-year to RM17.03 million from RM23.19 million, mainly caused by the effects of foreign exchange, while revenue rose 5.5% to RM184.77 million from RM175.22 million a year ago.

On its part, the company said it is “cautiously optimistic to maintain its growth prospects in 2024, and will take cautious approach in reviewing and monitoring the market conditions to be in line with the changing market trends.”

YSP is exposed to currency risk on sales, purchases and borrowings denominated in US dollar as well as Singapore dollar, Philippines peso, Indonesian rupiah, and Vietnamese dong. Every 5% drop in the US dollar against the ringgit would lower its results by RM117,000, according to its 2023 annual report.