March 8, 2011

SIME - OSK keeps 'sell' call on Sime Darby

Stock Name: SIME
Company Name: SIME DARBY BHD
Research House: OSK

OSK says Sime Darby is currently exploring and evaluating a potential investment in a refinery complex in France to serve the Southern European and potentially the North African market.

Despite the proposal, OSK is maintaining our 'sell' call on Sime Darby on valuation grounds.

"While appearing to be on the right track now, Sime Darby has a lot of catching up to do in the downstream area compared to its peers such as Wilmar International (Buy, TP or Target Price at S$6.15), IOI Corp (Sell, TP at RM4.41), KL Kepong (Neutral, TP at RM20.55 ) and Golden Agri (Trading Buy, TP at S$0.83), all of which are smaller than Sime Darby in terms of hectarage but are substantially stronger in downstream operations. - Reuters

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