A tale of 2 Hiap Teck

Hiap Teck Ventures (rm1.32) just released its earnings last Friday.

Saw two different research reports on it.

RHB Research has an underperform rating on it. Target price of rm1.10.

• X Hiap Teck’s has a dominant market position in the local bare steel pipe/structural hollow section industry, underpinned by its commanding market share. However, earnings risks are on the rise with the current upcycle in steel and steel product prices turning out to be short and fast slipping away. Valuation is rich with share price trading above our indicative fair value of RM1.10 based on 8x CY2007 EPS of 13.8sen. Maintain Underperform.

OSK has a target price of rm1.93.

Interesting, yes? The below is the screen shot taken of OSK write-up.

For me, the interesting point lies in the fy2007 numbers.

AS can seen from the above screen shot, OSK is estimating Hiap Teck net earnings (net profit) to be a very optimistic 69.3 million. Which as stated in their own table, this represent a growth (or change) of 76.6%!

RHB estimates?

Have a look at the screen-shot of RHB write-up below.

RHB's net earnings (net profit) estimates for Hiap Teck's fiscal 2007 earnings as seen from the above screen-shot if only 48.5 million.

Oh yes, an estimate is an estimate is an estimate.

But... in the case of Hiap Teck, don't you wonder why the estimates is varying by so much? RHB Research is estimating 48.5million while OSK is estimating 69.3 million.

I guess this explains why one's Target Price for Hiap teck is rm1.10 while the other is rm1.93.