PETALING JAYA: Renewable energy company Cypark Resources Bhd is on a roll again as its share price rose almost 20% or 14 sen to 86 sen today despite a downgrade by Public Investment Bank.
The stock has been on the rise since the middle of last year and is up 92% in the last six months.
The upswing has not gone unnoticed as it was one of the hottest counters of the day with 62.76 million shares changing hands at market close.
However, reasons for the spike in its share price is not entirely clear.
The group announced its 5th quarter results for the financial year ended April 30, 2023 (Q5 FY2023) last Friday. Its net profit for Q5 ended Jan 31, 2023 was up by 25.8% to RM6.77 million from RM5.38 million in the previous quarter.
For the cumulative 15-month period ending Jan 31, 2023, Cypark posted a net profit of RM55.47 million.
Due to changes in its fiscal year to an 18-month period ending April 30, 2023, no comparisons have been made on a year-on-year basis.
Cypark said in a Bursa filing in January this year that the change in its financial year is to allow for better availability of resources and improve management of audit and annual reporting, to strengthen operations and to refocus on the enlarged group’s business plan.
In the first trading day following the release of its financial results last Friday, its share price was almost unchanged, going down only half a sen yesterday, before suddenly surging as much as 14 sen today.
It ended the day up 17.4% or 12 sen to 84.5 sen today, giving the group a valuation of RM656.34 million.
PublicInvest’s downgrade
To add to the confusion, Public Investment Bank (PublicInvest) downgraded Cypark to “neutral” from “outperform”, lowering the target price to 63 sen from 85 sen.
In a research note yesterday, PublicInvest said “due to weaker than expected results and dilution from the recent private placement, we cut our earnings forecast (for Cypark)”.
Cypark reported lower revenue of RM32.9 million in Q5 FY2023, down 32% quarter-on-quarter, in the absence of revenue from the construction and engineering segment as most of its projects have been phased out from the construction phase.
On project updates, PublicInvest said Cypark’s waste-to-energy (WTE) plant achieved commercial operation in December 2022 and has started to recognise the sale of energy.
“Contributions remain minimal however and have been unable to offset the absence of revenue from the construction and engineering segment in Q5 FY2023,” it added. - FMT
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