Wednesday, May 25, 2011

CSC Holdings rated 'buy' by DMG

Stock Name: CSC
Company Name: CSC HOLDINGS LTD
Research House: DMG

DMG & Partners Securities in a May 20 research report says: "CSC's 4QFY11 earnings disappointed, coming in at a loss of $4.9 million, due to a $7.9 million impairment loss made on the Changi MotorSports Hub project receivable.

"We have lowered our FY2012 earnings by 37.6%, to reflect the slower than expected pick up in gross margins as well as higher expenses. A final dividend of 0.1 cent was declared, bringing total FY2011 payout to 0.5 cents (3.6% yield). Outlook remains positive as CSC is likely to secure more projects from the MRT Downtown Line (DTL) Stage 3 with its strong track record.

"We lower target price of 19 cents, based on 12x FY12/FY13 blended P/E, the level it was trading at in 2005 just before its earnings recovery. MAINTAIN BUY."

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