SINGAPORE (Feb 12): Phillip Capital is maintaining its “accumulate” rating on 800 Super Holdings with a target price of $1.35, or 17.8 times FY18 earnings.
This comes after the waste management company last week posted a 32% drop in 2Q earnings to $2.47 million on lower revenue and higher expenses.
See: 800 Super Holdings posts 32% drop in 2Q earnings to $2.47 mil
In a Monday report, analyst Richard Leow highlights lower staff costs and projects that are turning operational as some of the positives in the group’s latest set of results, even as quarterly revenue came in lower than expected.
With regards to the absence of an interim dividend for the quarter, Phillip attributes the negative surprise to the group’s need to conserve cash in order to fulfil the capex requirements of the public waste collection contract for the Pasir Ris-Bedok sector.
The research house nonetheless believes 800 Super’s outlook remains stable to positive, and continues to like the stock for its future earnings growth arising from the new projects which it believes will contribute positively to the group’s earnings.
See: 800 Super wins $194 mil public waste collection contract from NEA
As at 11.32am, shares in 800 Super are trading 5 cents lower at $1.09.
