Stock Name: Oceanus
Company Name: OCEANUS GROUP LIMITED
Research House: OCBC
“Out of the group’s three business segments, only Processed Marine Products (which accounts for 30% of group sales) performed well,” the house says, adding that Oceanus’ “restaurant expansion is too fast, too furious” with costs exceeding revenue growth.
Company Name: OCEANUS GROUP LIMITED
Research House: OCBC
OCBC downgrades Oceanus Group (579.SG) to Sell from Hold and cuts its fair value estimate to $0.19 from $0.32, citing a lack of clear catalysts and unjustified valuations after its 4Q net profit missed expectations.
“Out of the group’s three business segments, only Processed Marine Products (which accounts for 30% of group sales) performed well,” the house says, adding that Oceanus’ “restaurant expansion is too fast, too furious” with costs exceeding revenue growth.
“Oceanus has been underperforming expectations for several quarters. Based on its recent performances, this suggests that there are high execution risks surrounding its expansion,” the house says. “We previously valued the group at 1.8X NAV on the premise of super-normal growth, but in view of uncertainty surrounding its profitability and growth, we now value the stock at parity.”
Shares are flat at $0.225.
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