Tuesday, 8 May 2012

CIMB Research maintains Underperform on F&N, cuts target price to RM13.40

KUALA LUMPUR (May 8): CIMB Research has maintained its Underperform rating on Fraser & Neave Holdings Bhd at RM19 and cut its target price to RM13.40 (from RM13.50 previously) and said F&N’s interims were a letdown as core net profits came in at just 27% of its full-year forecast.

In a note Tuesday, the research house said that aside from topline weakness arising from the Thai floods, higher raw material prices took a bite out of margins.

“The poor results reinforce our Underperform rating.

“Even though we should see a stronger 2H as Dairies Thailand resumed production in Mar, we cut forecasts to account for pricier raw materials. This lowers our DCF-based target price,” it said.

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