By Ying Xian Wong
Malakoff Corp. shares fell early Monday after the Malaysian water and power product posted a first-quarter loss
The company’s shares plunged as much as 11% to 0.61 ringgit, on track for its biggest one-day loss in three years.
Malakoff said late Friday that it swung to net loss of MYR99.1 million ($21.5 million) for the first quarter, compared with net profit of MYR27.5 million a year ago, mainly due to “substantial negative fuel margin” at its power plants.
Revenue rose 21% to MYR2.29 billion, driven by higher energy payments at its plants.
Maybank Investment Bank analyst Tan Chi Wei lowered Malakoff’s 2023-2025 net profit estimates by 62%, 5% and 5%, respectively, to factor in its latest run rates, and said Malakoff’s likely sluggish 2023 earnings may weigh on near-term sentiment.
Maybank cut its target price to MYR0.60 from MYR0.65 but maintained a hold rating on Malakoff.
Meanwhile, Kenanga Investment Bank also cut its 2023 and 2024 net profit forecasts by 36% and 15%, respectively, to account for fuel margin losses in 2023 and a lower operating earnings base.
However, with coal prices having stabilized in recent months, Kenanga analyst Teh Kian Yeong expects Malakoff’s future fuel margin losses may ease.
Kenanga cut Malakoff’s target price to MYR0.80 from MYR0.95, but kept its outperform rating on the stock.
Write to Ying Xian Wong at yingxian.wong@wsj.com
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