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May 21, 2021

KLK Most Lucky!

 Kuala Lumpur Kepong Bhd (KLK) topped the list of most profitable counters on Bursa Malaysia today after recording an 18 -fold increase in its net profit in the second quarter ended March 31, 2021 (2QFY21) to RM490.44 million compared to RM27.89 million in the same period last year. then.

At 9.30am, the stock ‘rocketed’ 46 sen or 2.09% to RM22.48 with 68,300 shares traded. At that level, its market capitalization is RM23.7 billion.

Its parent company, Batu Kawan Bhd also received the impact of the good news when it became the fifth most profitable counter in this morning's trading session.

The counter jumped 20 sen or 1.05% to RM19.20 with a market capitalization of RM7.6 billion.

The increase in KLK's net profit was driven by higher commodity prices and strong income from the manufacturing and real estate segments.

Meanwhile, KLK's revenue increased by 18.5% to RM4.51 billion from RM3.81 billion previously. KLK announced an interim dividend of 20 sen per share, up from 15 sen 2QFY20, to be paid on Aug 3.

Meanwhile, Public Investment Bank maintained a ‘neutral’ recommendation on the counter but increased its target price to RM25.51 from RM25.41 previously, after raising its forecast on crude palm oil (CPO) prices following the current commodity upward momentum.

Meanwhile, MIDF Research maintained a 'buy' rating and a target price of RM27.01 after the firm examined KLK's rather challenging prospects following the increase in Covid-19 cases and the rise in palm kernel prices to offset the higher CPO price surge.

Apart from that, Hong Leong Investment Bank also maintained a ‘buy’ rating but lowered its target price to RM26.60 from RM26.64 after updating its valuation parameters.