Stock Name: HL Asia
Company Name: HONG LEONG ASIA LTD.
CIMB in an Aug 15 research report says: "2Q11 core net profit of $19.1 million (-41% y-o-y) was below our expectation and the Street's, at 21% of our FY2011 forecast. 1H11 accounts for 41% of our figure. The shortfall stemmed from a weaker-than-expected Xinfei performance which barely broke even.
"We cut our FY2011-2013 core EPS estimates by 19-22%, incorporating cuts in margins and unit sales across the units. We are now expecting a loss for Xinfei this year. Coupled with lower P/E targets for Yuchai and Xinfei on wider discounts and as their peers are de-rated, we reduce our SOP target price from $2.74 to $1.78.
"While its share price has pulled back to near September 2009 levels, we see more downside, expecting de-rating catalysts from weaker-than-expected earnings from Xinfei. MAINTAIN UNDERPERFORM."
Company Name: HONG LEONG ASIA LTD.
| Research House: CIMB | Price Call: SELL | Target Price: 1.78 |
CIMB in an Aug 15 research report says: "2Q11 core net profit of $19.1 million (-41% y-o-y) was below our expectation and the Street's, at 21% of our FY2011 forecast. 1H11 accounts for 41% of our figure. The shortfall stemmed from a weaker-than-expected Xinfei performance which barely broke even.
"We cut our FY2011-2013 core EPS estimates by 19-22%, incorporating cuts in margins and unit sales across the units. We are now expecting a loss for Xinfei this year. Coupled with lower P/E targets for Yuchai and Xinfei on wider discounts and as their peers are de-rated, we reduce our SOP target price from $2.74 to $1.78.
"While its share price has pulled back to near September 2009 levels, we see more downside, expecting de-rating catalysts from weaker-than-expected earnings from Xinfei. MAINTAIN UNDERPERFORM."
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