CIMB Research downgrades Jaya Tiasa to Underperform, ups target price to RM1.88

Business & Markets 2013
Written by theedgemalaysia.com
Thursday, 23 May 2013 07:34
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KUALA LUMPUR (May 23): CIMB Research has downgraded JAYA
TIASA HOLDINGS BHD [] to Underperform from Neutral at RM2.19
with a higher target price of RM1.88 (from RM1.82) and said Jaya
Tiasa's 9MFY6/13 results were below expectations at only 48% of its
full-year and 30% of consensus numbers.
In a note Thursday, the weaker performance was due to lowerthan-
expected FFB yield in its estates.
“We suspect that poor weather in Sarawak may have hampered the
harvest of FFB. We are cutting our FY13-15 earnings forecasts by
2-49% to account for lower FFB output growth, but raise our
SOP-based target price to reflect our recent upgrade in target market
P/E.
“But we downgrade our call from Neutral to Underperform as we are
concerned that an improvement in FFB output may not be sufficient to
stem the rising estate costs. De-rating catalysts are the poor 3Q results
and future earnings disappointments,” it said.