KUALA LUMPUR: CIMB Equities Research maintains its Outperform recommendation on Tanjong plc as the stock may be catalysed.
The research house said on Friday, March 26 the factors are if it gets a replacement numbers forecast operations (NFO) game, ii) Tropical Islands makes a sustainable turnaround earlier-than-expected, iii) Tanjong lines up M&As, or iv) lists its power arm in the medium term.
The report was issued after Tanjong's first ever post-results conference call, which were mostly negative.
CIMB Equities Research said the points raised were there may be a cash call to fund large-scale M&As, ii) RTO losses are likely to rise 15% in FY11, and iii) there are unlikely to be any power unlocking efforts, at least not over the next few months.
The main bright spot was management's commitment to a progressive dividend policy, which supports our projected gross dividend yields of 5-7%.
CIMB Equities Research said after factoring in wider RTO losses, it trimmed its FY11-13 core earnings by 1-2%, which clips 5 sen off our end-CY10 target price, taking it to RM21.05, still based on a 10% SOP discount.
“Despite the negative tone of the conference call, we continue to rate Tanjong an Outperform,” it said.
About Me
- Nuang
- Ibrahim bin Ramli@Nuang started his career with CIMB Wealth Advisors Berhad as Agency Manager in April, 2008.Previously he was an Internal Auditors and Accounts Executive with Perodua Sales Sdn Bhd since 17 August, 1994. His background:- 1.Certified of Achievement for Master Sales Leadership from Dr Lawrence Walter Ng of President of The Art Of Learning and International Of Learning Without Learning 2.Certified for eXtra Ordinary Performance of Lawrence Walter Award Certificate for One Million Ringgit Club 2007 3. Certified Life & General insurances 4. Conferred with Diploma in Business Studiess & Bachelor of Business Admin(Hons)Finance from UiTM, Terengganu Branch & Shah Alam respectively;
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