CIMB Research maintains Underperform on F&N

KUALA LUMPUR: CIMB Equities Research said F&N’s RM74 million core net profit for 3QFY9/11, which excludes a RM3.7 million gain from the disposal of an ice-cream unit, took 9M core net profit to RM237 million.

It said on Monday, Aug 8 that at 74% of its full-year forecast and consensus estimates, it is broadly in line with expectations. Also not surprising was the decision against an interim dividend.

“We maintain our forecasts and DCF-based target price of RM13.10 (unchanged WACC of 7.1%). The next few quarters will be crucial to F&N as it is looking for ways to plug the gap left by Coca-Cola and Sprite come Oct 1,” it said.

CIMB Equities Research said F&N’s FY11-13 P/Es of 21 times to 23 times are demanding and the most expensive in its Malaysian F&B portfolio.

“F&N remains an UNDERPERFORM, with the potential derating catalyst being margin pressure from pricier commodities. Switch to our new F&B favourite QSR Brands,” it said