KUCHING: Zhulian Corporation Bhd’s (Zhulian) net profit for year 2012 exceeded expectations driven by higher associate contribution.
“Zhulian recorded a fourth quarter(4Q12) net profit of RM31.3 million, taking financial year 2012 (FY12) earnings to RM117.1 million,” said HwangDBS Vickers Research Sdn Bhd (HwangDBS Vickers) in its research report.
It pointed out that the results were 110 per cent of its forecasts. The earnings were attributed the higher associate contributions of RM13.3 million, led by stronger exports to Indonesia.
The group was also noted to have enjoyed lower effective tax rate of 16.4 per cent in 4Q12 as compared with 17.6 per cent in 4Q11 and 19.6 per cent in 3Q12.
“Although sales and profit improved, earnings before interest and tax margin fell to 20.6 per cent in 4Q12 due to higher operating costs.”
Zhulian announced a fourth interim single-tier dividend per share (DPS) of three sen and a special single-tier DPS of 3.5 sen amounting to a total payout of RM29.9 million.
As such, the full year net DPS was at 15.5 sen. This beat HwangDBS Vickers’ assumption of 14 sen.
The research house went on to raise earnings for Zhulian after adjusting for higher contribution from the Indonesian operations and lower effective tax rate of 17 per cent.
“This also lifted our net DPS assumption from 15.6 sen to 16.7 sen for FY13 forecasts and from 17.7 sen to 18.9 sen for FY14 forecasts,” it added.
HwangDBS Vickers pegged a target price of RM2.80 per share for Zhulian based on 10 times revised FY13 earnings per share.