HL Asia - Hong Leong Asia target cut to $3.25 by DBS Vickers

Stock Name: HL Asia
Company Name: HONG LEONG ASIA LTD.
Research House: DBS Vickers

DBS Vickers downgrades Hong Leong Asia (H22.SG) to Fully Valued from Hold, cuts target price to $3.25 from $4.54 on “dampening sales caused by credit tightening”, downward ratings to most sectors group operates in, reports Dow Jones.



DBS Vickers notes Xinfei unit earnings growth was “a disappointment”, compares poorly with sector sales volume growth.

“We believe Xinfei is losing market shares to key competitors such as Midea and Meiling, which aggressively undercut prices after substantial capacity expansion to gain market shares,” says broker.



Expects both on-year, on-quarter 2H earnings for Hong Leong Asia to decline as credit tightening weighs on sales momentum in China, prevents distributors re-stocking. Shares down 2.3% to $3.38 at 10:50 a.m.