KLK / Lee Oi Hian

[winston]

not vested

Looking forward to a better FY25E indeed

Positives priced in; maintain HOLD

We hosted KLK on a post-results brief, and felt reassured that FY25E will be a better year with YoY earnings growth emanating from both the upstream and manufacturing divisions.

The lumpy impairment on Synthomer is unlikely to recur in FY25E.

The group effective tax rate should normalise too.

We keep our +69% core EPS growth estimates for FY25E.

Trading at 19x FY25E PER, the positives are priced in.

Maintain HOLD & TP of MYR21.30 on 19x FY25E PER, its -0.5SD of 6Y mean. We prefer SDG MK (BUY, CP: MYR5.06, TP: MYR5.41).

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/424765.pdf

[winston]

not vested

2445 KLK (BUY)
Broadly within expectations

We deem KLK’s 1HFY26 core earnings of RM730.1m (+9.7% YoY) broadly within expectations, as KLK has yet to recognise its share of losses from its 21.3%-owned associate (Synthomer plc) in this quarter’s financials.

Declared interim DPS of 20 sen (ex-date: 9 Jul 2026).

Maintain earnings forecasts and SOP-derived TP of RM21.90.

Upgrade to BUY as valuations have turned more palatable following recent share price retracement.

Source: HLIB