Stock Name: MMCCORP
Company Name: MMC CORPORATION BHD
Research House: OSK
KUALA LUMPUR: OSK Research has maintained its trading buy call on MMC Corp at RM2.23 but lowered its target price to RM2.54 (from RM2.80 previously) and said the company's results disappointed again, pulled down by continued losses at Zelan and high tax and minority interest (MI) rates.
"While we expect the high tax and MI rates to normalise, the disappointment at Zelan leads us to forecast zero associate earnings for 2010 and strip out Zelan from of our Sum of Parts (SOP) value for MMC.
"Due to the lower net profit forecast (down 5%-6%) and a higher attributed WACC due to market volatility, our SOP fair value is reduced to RM2.54," it said.
Nonetheless, OSK Research said there was still value in the company, and the upcoming 10MP as well as hopes for expansion of the Tanjung Bin power plant prompt it to maintain its trading buy call.
Company Name: MMC CORPORATION BHD
Research House: OSK
KUALA LUMPUR: OSK Research has maintained its trading buy call on MMC Corp at RM2.23 but lowered its target price to RM2.54 (from RM2.80 previously) and said the company's results disappointed again, pulled down by continued losses at Zelan and high tax and minority interest (MI) rates.
"While we expect the high tax and MI rates to normalise, the disappointment at Zelan leads us to forecast zero associate earnings for 2010 and strip out Zelan from of our Sum of Parts (SOP) value for MMC.
"Due to the lower net profit forecast (down 5%-6%) and a higher attributed WACC due to market volatility, our SOP fair value is reduced to RM2.54," it said.
Nonetheless, OSK Research said there was still value in the company, and the upcoming 10MP as well as hopes for expansion of the Tanjung Bin power plant prompt it to maintain its trading buy call.
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