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NewsAllianceDBS Research expects a weaker 4Q for Oldtown
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AllianceDBS Research expects a weaker 4Q for Oldtown
by Cals Fri 13 Mar 2015, 16:23
AllianceDBS Research expects a weaker 4Q for Oldtown
By TheEdge Markets.com / theedgemarkets.com | March 13, 2015 : 8:52 AM MYT
KUALA LUMPUR (March 13): [size=14]AllianceDBS Research has maintained its “Buy” rating on Oldtown Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) with a lower target price of RM2.20 (from RM2.25) and said the implementation of teh Goods and Services Tax (GST) would have minimal impact on the company’s margins, but could tenporarily affect fast moving consumer goods (FMCG) sales.
In a note today, AllianceDBS vice president for equity Cheah King Yoong said the implementation of GST in April would have minimal impact on OldTown because it would merely replace the 6% sales tax in the F&B segment and 10% sales tax in FMCG segment.
“Nonetheless, we understand the FMCG business may be temporarily affected as domestic retailers are cautious of restocking in the months prior to GST implementation.
“We trimmed FY15F earnings by 6%, mainly after lowering our growth assumption for FMCG revenue for FY15 to 2% (previously 7%), in view of lower contribution from 4Q. Our FY16-FY17F earnings are largely unchanged.
“In line with the earnings downgrade, we nudged down target price to RM2.20, pegged to an unchanged 19x CY15EPS. Yield is decent at 3-4%,” he said.
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By TheEdge Markets.com / theedgemarkets.com | March 13, 2015 : 8:52 AM MYT
KUALA LUMPUR (March 13): [size=14]AllianceDBS Research has maintained its “Buy” rating on Oldtown Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) with a lower target price of RM2.20 (from RM2.25) and said the implementation of teh Goods and Services Tax (GST) would have minimal impact on the company’s margins, but could tenporarily affect fast moving consumer goods (FMCG) sales.
In a note today, AllianceDBS vice president for equity Cheah King Yoong said the implementation of GST in April would have minimal impact on OldTown because it would merely replace the 6% sales tax in the F&B segment and 10% sales tax in FMCG segment.
“Nonetheless, we understand the FMCG business may be temporarily affected as domestic retailers are cautious of restocking in the months prior to GST implementation.
“We trimmed FY15F earnings by 6%, mainly after lowering our growth assumption for FMCG revenue for FY15 to 2% (previously 7%), in view of lower contribution from 4Q. Our FY16-FY17F earnings are largely unchanged.
“In line with the earnings downgrade, we nudged down target price to RM2.20, pegged to an unchanged 19x CY15EPS. Yield is decent at 3-4%,” he said.
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