AusGroup - AusGroup target cut to $0.40 from $0.47 by CIMB

Stock Name: AusGroup
Company Name: AUSGROUP LIMITED
Research House: CIMB

CIMB cuts AusGroup (5GJ.SG) target price to $0.40 from $0.47, based on 8.5x FY11 P/E, after reducing FY11-12 earnings estimates by 12%-19% to factor in lower gross margin, higher operating expenditure assumptions, according to Dow Jones.



CIMB says margins in fiscal 4Q10 ended June disappointing due to loss of construction contract. Expects order flows to remain weak, improve only from fiscal 2H11.



Research house keeps Underperform call, citing limited catalysts near term. AusGroup provides construction services to companies involved in development of natural resources. Shares off 1.0% at $0.48.