DMG & Partners Securities in a June 27 research report says: "We revise Indofood Agri's (IFAR) FY2011 earnings downwards by 13.8%, on the back of a dilution of its stake in 72%-owned (down from 90%) subsidiary, PT Salim Ivomas Pratama (PT SIMP) post listing.
"The stock had been sold down on concerns over earnings dilution and the implied lower valuation of IFAR with PT SIMP's listing. However, there are re-rating catalysts in sight, such as earnings accretive acquisitions. We are lowering our FY2011 earnings by 13.8% from IDR1.9t to IDR1.6t, on the back of shareholding dilution in PT SIMP post listing.
"However, valuation is looking inexpensive with IFAR trading at 10x FY11 EPS, against its peers of around mid teens. Target price of $2.41, based on 15x FY11 EPS and a CPO price assumption of RM3,200/tonne. MAINTAIN BUY."
No comments:
Post a Comment