Stock Name: TASEK
Company Name: TASEK CORPORATION BHD
Research House: CIMB
KUALA LUMPUR: CIMB Equities Research has downgraded Tasek Corp from Outperform to Neutral due to the lack of short-term catalysts due to weak demand and high rebates.
It said on Monday, April 5 its recent plant tour left it feeling optimistic about Tasek's medium- to-long term prospects. However, earnings could be weak in the near term given lower sales volumes and higher rebates across the industry.
"In light of this, we are cutting our FY10 EPS by 11%. However, our blended target price is raised from RM5.20 to RM5.90 as we revise our target valuations to 13.5x P/E (12x previously) and 1.0x P/BV (0.8x previously) given the potential improvement in the mid- to long-term prospects," it said.
CIMB Research said while it acknowledges that a stronger pick-up in demand is likely to come through in 2H, the rise in demand is coming through more slowly than expected.
It added furthermore, there is limited share price upside given the buying interest seen since its 4Q results announcement. Given the lack of short-term catalysts due to weak demand and high rebates, we downgrade the stock from Outperform to Neutral.
Company Name: TASEK CORPORATION BHD
Research House: CIMB
KUALA LUMPUR: CIMB Equities Research has downgraded Tasek Corp from Outperform to Neutral due to the lack of short-term catalysts due to weak demand and high rebates.
It said on Monday, April 5 its recent plant tour left it feeling optimistic about Tasek's medium- to-long term prospects. However, earnings could be weak in the near term given lower sales volumes and higher rebates across the industry.
"In light of this, we are cutting our FY10 EPS by 11%. However, our blended target price is raised from RM5.20 to RM5.90 as we revise our target valuations to 13.5x P/E (12x previously) and 1.0x P/BV (0.8x previously) given the potential improvement in the mid- to long-term prospects," it said.
CIMB Research said while it acknowledges that a stronger pick-up in demand is likely to come through in 2H, the rise in demand is coming through more slowly than expected.
It added furthermore, there is limited share price upside given the buying interest seen since its 4Q results announcement. Given the lack of short-term catalysts due to weak demand and high rebates, we downgrade the stock from Outperform to Neutral.
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