Alliance IB Research maintains Neutral on GenM, raises target price to RM4.55

Alliance IB Research maintains Neutral on GenM, raises target price to RM4.55
Business & Markets 2013
Written by theedgemalaysia.com
Friday, 29 November 2013 10:29

KUALA LUMPUR (Nov 29): Alliance IB Research has maintained its Neutral rating on Genting Malaysia Bhd (GenM) at RM4.28 with a higher target price of RM4.55 (from RM4.53) and said GenM’s 9MFY13 core earnings met about 82.3% of house and consensus estimates mainly due to lower than expected effective tax rate.

In a note Friday, Alliance IB Research vice president for equity Cheah King Yoong said that stripping out various exceptional items including the social responsibility contributions estimated to be RM100 million incurred in 1Q, GenM’s 9MFY13 core net profit surged by 20.1% year-on-year to RM1,394.7 million.

“This accounts for 82.3% house and consensus full-year estimates, respectively.

“We raise our FY13 EPS by 6.0% to account for the lower effective tax rate assumption, but keep our earnings forecasts for FY14-15 largely unchanged.
“We maintain our Neutral recommendation with higher target price of RM4.55, based on our sum-of-parts (SOP) valuation,” he said.