Phillip Capital upgraded CNMC Goldmine to Accumulate, but it was due to the stock’s recent drop.
It kept the target price unchanged at S$0.30 and cut its 2018 earnings per share (EPS) forecast to 1.5 U.S. cents from 2 U.S. cents as the full production from the CIL (carbon-in-leach) plant may only start in the second quarter of this year.
Still, the brokerage said it expected a turnaround this year.
Phillip noted that the trial operation of the CIL met expectations. “With the help of the plant and available high-grade ore stockpiled, it is expected to see significant improvement in output volume this year,” the brokerage said in the note on Tuesday.
“Another positive factor is the resumption of the uptrend in gold price,” it said. It raised its forecast for average gold prices to US$1,300 an ounce for 2018, up from US$1,280 previously.
But it also noted more capex was likely for flotation facility construction and a planned dual primary listing in Hong Kong was likely to bring additional operating expenses.
For the fourth-quarter results, Phillip noted that revenue was in line with its expectations, while net profit was a beat, mainly on the “unexpected downward adjustment of compensation for employees and key management.”
The stock ended unchanged at S$0.26 on Tuesday.