KencanaAgri - Kencana cut to Hold by DBS; $0.35 target

Stock Name: KencanaAgri
Company Name: KENCANA AGRI LIMITED
Research House: DBS Vickers

DBS Vickers downgrades Kencana Agri (F9M.SG) to Hold from Buy, cuts target price to $0.35 from $0.39 after revising down earnings forecast as house thinks placement of shares to Wilmar unlikely to manifest in Kencana’s medium-term profitability, says Dow Jones.



“We cut FY10F and FY11F revenue forecasts by 26.5% and 4.3%, resulting in earnings revisions of 43.2% and 10.2%, respectively,” DBS says; 2Q net profit of US$1.248 million ($1.7 million) was significantly below broker’s expectations.



Kencana said late Friday Wilmar will buy 20% stake in the company for $80.4 million. Stock last down 2.5% at $0.385.