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Friday, June 17, 2016

Expect stronger quarters ahead for CBIP, says AllianceDBS Research

Expect stronger quarters ahead for CBIP, says AllianceDBS Research
By theedgemarkets.com / theedgemarkets.com | June 17, 2016 : 8:36 AM MYT

KUALA LUMPUR (June 17): AllianceDBS Research has maintained its “Buy” rating on CB Industrial Product Holdings Bhd (CBIP) at RM2.03 with a lower target price of RM2.30 (from RM2.45).

In a note today, AllianceDBS IB vice president for equity Cheah King Yoong said despite a weak start to the year, he still expects the group’s financial performance to improve in the upcoming quarters.

He said CBIP’s earnings could be dragged by its plantation segment.

“Nonetheless, we are aware that the losses in its plantation segment could be wider than the RM4 million we estimated as management accelerates its planting exercise.

“We cut our FY16-17 earnings by 7-11% to account for the combined effects of (1) weak 1QFY16 results, (2) higher losses of RM10 million assumed for its plantation segment, and (3) bookkeeping purposes.

“Post earnings revisions, we trim our target price for the group to RM2.30 (from RM2.45), which is pegged to an unchanged 12- month forward PE of 12x,” he said.

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