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CIMB downgrades Gas Malaysia after higher depreciation, taxes lowers profit
by Cals Fri 16 May 2014, 17:31
| CIMB downgrades Gas Malaysia after higher depreciation, taxes lowers profit |
| Business & Markets 2014 |
| Written by Jonathan Gan of theedgemalaysia.com |
| Friday, 16 May 2014 10:21 KUALA LUMPUR (May 16): CIMB Investment Bank Bhd has downgraded its profit forecast for Gas Malaysia Bhd and the stock's target price (TP). The downgrades came after Gas Malaysia's first quarter core net profit of RM41.6 million came in below CIMB's expectation. Higher depreciation expenses and tax rates were behind Gas Malaysia’s lower profit, according to CIMB analyst Faisal Syed Ahmad. In a note, Faisal said : “After adjusting for the higher depreciation and tax, our FY14-16 earnings estimates are reduced by 1-3.6%. Our TP is also subsequently lower at RM3.96 based on 24 times FY15 price/earnings from RM4.10 previously." At 9:56 am, Gas Malaysia shares rose one sen or 0.3% to RM3.61. Despite the TP cut, Faisal expects stronger quarters ahead for Gas Malaysia as volume continues to grow. “Gas Malaysia’s selling price is likely to continue to be revised upwards as the domestic gas volume it consumes will continue to be reduced by Petronas... We expect the next revision to come around Nov/Dec this year,” said Faisal. |
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