KUALA LUMPUR: OSK Research is maintaining its Sell call on Sime Darby after its six-months earnings for the period ended Dec 31, 2010 suggest that its RM2.5 billion key performance indicator (KPI) net profit was a lowball number.
The research house said on Friday, Feb 25 it had raised its forecast to factor in stronger motor division performance.
'Its operational improvement notwithstanding, we are maintaining our Sell call given that the PLANTATION [] sector is weakening and Sime is among the most expensive at 17.8x FY11 and 16.5x FY12 earnings, after our upward revision in earnings forecast.
'We suspect that much of the optimism relating to the new management has been factored in given the sharply higher consensus forecast against management's KPI net profit,' OSK Research said.
The research house said on Friday, Feb 25 it had raised its forecast to factor in stronger motor division performance.
'Its operational improvement notwithstanding, we are maintaining our Sell call given that the PLANTATION [] sector is weakening and Sime is among the most expensive at 17.8x FY11 and 16.5x FY12 earnings, after our upward revision in earnings forecast.
'We suspect that much of the optimism relating to the new management has been factored in given the sharply higher consensus forecast against management's KPI net profit,' OSK Research said.
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