MIDF keeps 'buy' call on Sime Darby

MIDF Research says Sime Darby Bhd's fourth quarter financial year 2011 earnings are expected to show stellar year-on-year growth.

"We estimate its net profit in financial year 2011 to be RM3,244.56 million, which is 6.1 per cent ahead of our expectation.

"The estimated earnings would be more than quadruple when compared to the corresponding period last year, mainly due to the low base factor," it said in a research note today.

Sime Darby is expected to release its fourth quarter financial year 2011 results tomorrow.

MIDF Research has estimated Sime Darby to register a net profit of RM892.6 million in the fourth quarter period as compared to the net loss of RM77.4 million in the same quarter last year.

It said the earnings will be mainly contributed by its plantation and motor divisions, with the former expected to realise RM741.02 million in profit before tax.

MIDF Research said Sime Darby is also expected to invest RM280 million in two new hospitals located at Ara Damansara and Subang Jaya which are expected to be in operation by the end of next year.

It said the healthcare businesses are projected to contribute about 20 per cent of Sime Darby's total revenue in the next three to five years.

MIDF Research has reiterated its "buy" call on Sime Darby with an unchanged target price of RM10.55. - Bernama