Eastern Pacific Industrial ( EPIC ): BUY, target price RM2.43

OSK Research Sdn Bhd maintained a "buy" call on Eastern Pacific Industrial Corp Bhd (EPIC) (8265)and have upgraded its financial year 2010-2011 forecast by 10 per cent.

This takes into account the better performance, in line with the expected recovery in oil and gas (O&G) activities.

"Our target price for EPIC has also been upgraded to RM2.43 from RM2.19 previously based on the existing price earnings ratio of eight times financial year 2011 earnings a share.

The company is one of the few O&G stocks with an attractive dividend yield of about 5 per cent to 6 per cent and had net cash of RM65.8 million as at the second quarter of financial year 2010.
OSK said results for that quarter were above expectations, mainly contributed by the increase in port operations and O&G activities off the coast of Terengganu.

"Although the second quarter results were within consensus estimates, the results were above ours, making up 52 per cent and 57 per cent of consensus and our financial year 2010 forecasts," it said.

EPIC's second quarter revenue and net profit jumped 30.1 per cent and 51.2 per cent quarter-on-quarter to RM61.6 million and RM14.8 million respectively.