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Tuesday, February 18, 2014

Cuscapi to sink in the red for 4Q, says CIMB Research (Edge)

Cuscapi Bhd is forecast to incur an RM1 million net loss in 4Q FY13 on delayed major jobs as compared to the previous forecast of RM3 million profit, according to CIMB Investment Bank Research.

The research house said it cut Cuscapi’s 2013 earnings per share (EPS), but maintained 2014 and 2015 EPS as commercial revenue from REV tables should contribute this year.
In a note today, CIMB IB’s research analyst Nigel Foo said: “We expect the company to post a net loss in 4Q FY13, following 3Q FY13’s disappointing loss.”

“But this year should be much better as jobs delayed from last year will commence.”

Foo said he maintained ‘add’ for the stock at 39 sen with unchanged target price of 70 sen.

“Our REV forecast is conservative until management is able to demonstrate its ability to bring in subscriptions for this product,” he said.

Touching on the RM21 million klia2 contract secured from Malaysia Airports Holdings Bhd, Foo deemed it ‘not a surprise’.

“This contract was one of the few major jobs which was supposed to have been secured by Cuscapi last year.”

In 3Q FY13, he pointed out the firm recorded a RM2.8 million net loss due to delays in securing jobs last year coupled with management growing its infrastructure and headcount.

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