KUALA LUMPUR (Nov 17): CIMB Equities Research has downgraded agrochemical and pesticide manufacturer Imaspro to a sell after its first quarter (1QFY6/12) earnings were below expectations.
It said on Thursday the net profit of RM1.1m was below expectations, being only 11% of its full-year forecast.
“We had overestimated its cost pass-through ability and been too optimistic about the demand growth,” it said.
CIMB Research said on the dividend front, however, the company did not disappoint, declaring a single-tier first and final dividend of 3.5 sen.
“Factoring slower growth and weaker margins, we slash our FY12-14 EPS numbers by 10-24%. Our target price is chopped from RM1.13 to RM0.78, still pegged to a 40% discount to our target market P/E, revised from 14.5x CY12 to 12.6x CY13.
“We also downgrade the stock from Buy to SELL. Potential de-rating catalysts include 1) this results miss, 2) stiff competition and 3) higher raw material prices which erode profit margins. Poor share liquidity is another negative,” it said.
It said on Thursday the net profit of RM1.1m was below expectations, being only 11% of its full-year forecast.
“We had overestimated its cost pass-through ability and been too optimistic about the demand growth,” it said.
CIMB Research said on the dividend front, however, the company did not disappoint, declaring a single-tier first and final dividend of 3.5 sen.
“Factoring slower growth and weaker margins, we slash our FY12-14 EPS numbers by 10-24%. Our target price is chopped from RM1.13 to RM0.78, still pegged to a 40% discount to our target market P/E, revised from 14.5x CY12 to 12.6x CY13.
“We also downgrade the stock from Buy to SELL. Potential de-rating catalysts include 1) this results miss, 2) stiff competition and 3) higher raw material prices which erode profit margins. Poor share liquidity is another negative,” it said.
