Stock Name: Rotary
Company Name: ROTARY ENGINEERING LIMITED
CIMB in an Aug 5 research report says: "Forming 14% of our FY2011 forecast and 15% of consensus, 2Q11 net profit of $10.2 million (-26% y-o-y) is 50% below our expectation because of lower-than-expected turnover.
"1H11 net profit of $15.5 million (-44% y-o-y) forms 22% of our FY2011 number. An interim dividend of 1 cent (37% payout) has been declared, as expected. We cut our earnings estimates for FY2011-2013 by 11-30% on lower revenue and margin assumptions.
"Our target price accordingly drops to 90 cents, still based on 9x CY12 P/E (5-year peer average), from $1.26. A projected 5% dividend yield and the stock's YTD decline of 21% should limit downside risks. DOWNGRADE TO NEUTRAL."
Company Name: ROTARY ENGINEERING LIMITED
| Research House: CIMB | Price Call: HOLD | Target Price: 0.90 |
CIMB in an Aug 5 research report says: "Forming 14% of our FY2011 forecast and 15% of consensus, 2Q11 net profit of $10.2 million (-26% y-o-y) is 50% below our expectation because of lower-than-expected turnover.
"1H11 net profit of $15.5 million (-44% y-o-y) forms 22% of our FY2011 number. An interim dividend of 1 cent (37% payout) has been declared, as expected. We cut our earnings estimates for FY2011-2013 by 11-30% on lower revenue and margin assumptions.
"Our target price accordingly drops to 90 cents, still based on 9x CY12 P/E (5-year peer average), from $1.26. A projected 5% dividend yield and the stock's YTD decline of 21% should limit downside risks. DOWNGRADE TO NEUTRAL."
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