Stock Name: SIME
Company Name: SIME DARBY BHD
Research House: OSK
Sime Darby Bhd
(June 15, RM7.81)
Maintain sell at RM7.81 with target price of RM6.74: Datuk Mohd Bakke Salleh has been designated as the new president and group chief executive of Sime Darby, effective as soon as practicable.
Mohd Bakke, 56, was chosen in view of his expertise, experience and his proven track record in managing large corporations. Mohd Bakke, who is the CEO of Felda Global Ventures Holdings, has the necessary experience in corporate restructuring exercises as well as management expertise in the plantation and property industries.
Mohd Bakke is highly regarded in the corporate sector. Prior to his appointment at Felda Global, he served in various capacities within government-linked companies.
He was Group MD of Felda Holdings, Group MD and chief executive of Lembaga Tabung Haji, and has served as the director of the property division of Pengurusan Danaharta Bhd. He has also served in several companies within the Permodalan Nasional Bhd group.
We view the appointment as positive as one of the many elements of uncertainty is removed. However, after much disappointment, the market is likely to wait and see if Mohd Bakke is able to straighten out Sime and turn it into a respectable company.
It is also yet to be seen if the new CEO is given a free hand to shake up the company in whatever way necessary like what Datuk Seri Idris Jala did in Malaysia Airlines.
We find it highly unusual that Sime's board of directors has yet to meet Mohd Bakke as one would think that the appointment of a CEO is the board's prerogative and whoever is appointed should have gone through a series of meetings with the board to ensure that he is the right person for the job.
According to Sime's CFO Tong Poh Keow, PWC is still carrying on forensic investigation on the loss-making subsidiaries, the result of which will be known in August.
We are maintaining our sell call with a target price of RM6.74 as we view Sime as substantially overvalued and lacking in focus.
For large cap plantation exposure, we prefer Wilmar International (buy, target price S$7.35) and Golden Agri (buy, TP S$0.68), both of which are highly focused and well-managed and are trading at PE multiples of under 15 times compared to Sime's 18 times. ' OSK Investment Research, June 15
This article appeared in The Edge Financial Daily, June 16, 2010.
Company Name: SIME DARBY BHD
Research House: OSK
Sime Darby Bhd
(June 15, RM7.81)
Maintain sell at RM7.81 with target price of RM6.74: Datuk Mohd Bakke Salleh has been designated as the new president and group chief executive of Sime Darby, effective as soon as practicable.
Mohd Bakke, 56, was chosen in view of his expertise, experience and his proven track record in managing large corporations. Mohd Bakke, who is the CEO of Felda Global Ventures Holdings, has the necessary experience in corporate restructuring exercises as well as management expertise in the plantation and property industries.
Mohd Bakke is highly regarded in the corporate sector. Prior to his appointment at Felda Global, he served in various capacities within government-linked companies.
He was Group MD of Felda Holdings, Group MD and chief executive of Lembaga Tabung Haji, and has served as the director of the property division of Pengurusan Danaharta Bhd. He has also served in several companies within the Permodalan Nasional Bhd group.
We view the appointment as positive as one of the many elements of uncertainty is removed. However, after much disappointment, the market is likely to wait and see if Mohd Bakke is able to straighten out Sime and turn it into a respectable company.
It is also yet to be seen if the new CEO is given a free hand to shake up the company in whatever way necessary like what Datuk Seri Idris Jala did in Malaysia Airlines.
We find it highly unusual that Sime's board of directors has yet to meet Mohd Bakke as one would think that the appointment of a CEO is the board's prerogative and whoever is appointed should have gone through a series of meetings with the board to ensure that he is the right person for the job.
According to Sime's CFO Tong Poh Keow, PWC is still carrying on forensic investigation on the loss-making subsidiaries, the result of which will be known in August.
We are maintaining our sell call with a target price of RM6.74 as we view Sime as substantially overvalued and lacking in focus.
For large cap plantation exposure, we prefer Wilmar International (buy, target price S$7.35) and Golden Agri (buy, TP S$0.68), both of which are highly focused and well-managed and are trading at PE multiples of under 15 times compared to Sime's 18 times. ' OSK Investment Research, June 15
This article appeared in The Edge Financial Daily, June 16, 2010.
No comments:
Post a Comment