KUALA LUMPUR: CIMB Equities Research has downgraded Tasek Corp from Outperform to Neutral due to the lack of short-term catalysts due to weak demand and high rebates.
It said on Monday, April 5 its recent plant tour left it feeling optimistic about Tasek's medium- to-long term prospects. However, earnings could be weak in the near term given lower sales volumes and higher rebates across the industry.
"In light of this, we are cutting our FY10 EPS by 11%. However, our blended target price is raised from RM5.20 to RM5.90 as we revise our target valuations to 13.5x P/E (12x previously) and 1.0x P/BV (0.8x previously) given the potential improvement in the mid- to long-term prospects," it said.
CIMB Research said while it acknowledges that a stronger pick-up in demand is likely to come through in 2H, the rise in demand is coming through more slowly than expected.
It added furthermore, there is limited share price upside given the buying interest seen since its 4Q results announcement. Given the lack of short-term catalysts due to weak demand and high rebates, we downgrade the stock from Outperform to Neutral.
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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