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CIMB Research maintains Underperform on Cocoaland
by hlk Mon 29 Aug 2011, 18:18
KUALA LUMPUR: CIMB Equities Research is maintaining its Underperform on COCOALAND HOLDINGS BHD [] at RM1.88.
It said on Monday, Aug 29 that at RM1.88, it was based on 13.1 times price-to-earnings, a 10% discount to its 14.5 times target market price-to-earnings.
“The stock remains an Underperform given the potential downside triggers of i) a further rise in raw material and packaging costs, ii) larger-than-expected losses for its bottling operations and iii) delays in the CONSTRUCTION [] of its new factory,” it said.
CIMB Research said a seasonally stronger 2H should pull Cocoaland’s full-year earnings back in line with its forecast.
“We, therefore, consider 1H11 results to be in line with both our and market expectations even though it came in at only 94% of our forecast when annualised. No interim dividend was declared, which was within our expectations,” it said.
It said on Monday, Aug 29 that at RM1.88, it was based on 13.1 times price-to-earnings, a 10% discount to its 14.5 times target market price-to-earnings.
“The stock remains an Underperform given the potential downside triggers of i) a further rise in raw material and packaging costs, ii) larger-than-expected losses for its bottling operations and iii) delays in the CONSTRUCTION [] of its new factory,” it said.
CIMB Research said a seasonally stronger 2H should pull Cocoaland’s full-year earnings back in line with its forecast.
“We, therefore, consider 1H11 results to be in line with both our and market expectations even though it came in at only 94% of our forecast when annualised. No interim dividend was declared, which was within our expectations,” it said.
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