MY : Velesto Energy Berhad - FY22F likely in the red; FY23F may improve

1Q22 core net loss of RM46m was below expectations against our full-year profit forecast of RM35m and consensus loss forecast of RM12m. Reiterate Hold with lower DCF-based TP of 11.5 sen as we cut our FY22F utilisation assumption and raise the cost of equity discount rate. We expect Velesto to report a quarterly loss in 2Q22F that is fairly similar to 1Q22, and for FY22F to be in the red, though we expect profits in FY23F.