Stock Name: MISC
Company Name: MISC BHD
Research House: AMMB
KUALA LUMPUR: AmResearch has downgraded MISC BHD []'' to Hold from Buy previously and lowers its discounted cashflow-derived fair value to RM7.30 a share from RM11.80 a share.
The research house said on Friday, March 25 that it had cut its earnings projections and attached a higher 10% discount to its sum-of-parts valuation from 5% previously given deteriorating shipping fundamentals.
'We have cut our projections by 48-57% over FY11F-13F after factoring in lower tanker and container rates as well as higher bunker fuel cost assumptions. Reflecting our bearish view, our projections are now 32%-34% below consensus estimates over the FY11-13 forecast period,' it said.
AmResearch said tanker rates have been weaker than expected, as seen by the absence of winter peak in 4QCY10.'' Accelerating fleet growth and a shift forward in delayed orders means oversupply will worsen over the next 2 years.
The research house added that Clarksons projects global tanker fleet growth at 6.4% in 2011 and 6.7% in 2012 versus the past 4-year average fleet growth of 5.8%.
'MISC's valuation is already rich at 30x FY12F earnings, versus the broader market's PER of 14x. MISC's status as a high-beta cyclical stock positions it unfavourably in the current volatile market environment. At just 21% YoY EPS growth and 114% premium valuation to the KLCI, MISC is likely to underperform the index over the next 12 months,' it said.
Company Name: MISC BHD
Research House: AMMB
KUALA LUMPUR: AmResearch has downgraded MISC BHD []'' to Hold from Buy previously and lowers its discounted cashflow-derived fair value to RM7.30 a share from RM11.80 a share.
The research house said on Friday, March 25 that it had cut its earnings projections and attached a higher 10% discount to its sum-of-parts valuation from 5% previously given deteriorating shipping fundamentals.
'We have cut our projections by 48-57% over FY11F-13F after factoring in lower tanker and container rates as well as higher bunker fuel cost assumptions. Reflecting our bearish view, our projections are now 32%-34% below consensus estimates over the FY11-13 forecast period,' it said.
AmResearch said tanker rates have been weaker than expected, as seen by the absence of winter peak in 4QCY10.'' Accelerating fleet growth and a shift forward in delayed orders means oversupply will worsen over the next 2 years.
The research house added that Clarksons projects global tanker fleet growth at 6.4% in 2011 and 6.7% in 2012 versus the past 4-year average fleet growth of 5.8%.
'MISC's valuation is already rich at 30x FY12F earnings, versus the broader market's PER of 14x. MISC's status as a high-beta cyclical stock positions it unfavourably in the current volatile market environment. At just 21% YoY EPS growth and 114% premium valuation to the KLCI, MISC is likely to underperform the index over the next 12 months,' it said.
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