SINGAPORE (Nov 14): SAC Advisors is keeping its “buy” call on Sanli Environmental with an unchanged target price of 36 cents.
“We are keeping our rating and target price unchanged pending our meeting with management,” says analyst Terence Chua in a Tuesday report.
This comes after Sanli saw its earnings tumble 70.5% to $0.66 million in the first half of FY18, down from $2.2 million a year ago, mainly due to higher expenses.
Administrative expenses climbed 25.7% to $2.1 million, mainly due to increase in employees’ remuneration as a result of an increase in headcount and salaries.
Other operating expenses quadrupled to $1.6 million, mainly due to the recognition of one-off IPO expenses of $1.2 million pursuant to its initial public offering in June 2017.
Revenue fell 8.9% to $30.8 million during the quarter, from $33.7 million a year ago.
The decrease in group turnover was mainly attributed to the decrease in contribution from its Operations and Maintenance segment, arising from keen competition and a weaker market experienced during the period.
“The weaker top-line also translated into a weaker profit before tax of 13.4% when we strip out one-off IPO expenses,” says Chua.
As at 3.57pm, shares of Sanli are trading 1 cent lower, or down 3.3%, at 29 cents, implying an estimated price-to-earnings ratio of 13.9 times and a dividend yield of 1.2% in FY18.
