Company Name: THE THINK ENVIRONMENTAL CO LTD
Research House: DMG
DMG cuts Think Environmental (A78.SG) target price to $0.135 from $0.350 and keeps the stock at Sell after the company announced it has entered into a MOA with Mornington Offshore for the proposed investment in the latter which owns 100% stake in a gold exploration company, Societe Emas Mali.
The house says details of the investment in Mornington “remain scanty,” but views the move into offshore gold mining negatively “due to its shift in focus away from the troubled environmental business, and the lack of experience in offshore gold mining in a new country.”
The house also cuts its FY11F-FY12F earnings estimates by 95%-77% respectively due to disappointing delays in operations of Think’s UK-based associates, Think Environmental and Think Greenergy.
Shares are down 3.0% at $0.640.
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