Thursday, March 10, 2011

OSK Research upgrades JTI to Buy from Neutral, sees special dividend payment

KUALA LUMPUR: OSK Research said Japan Tobacco International's (JTI) cash pile has been growing since its last capital repayment in 1Q2009.

It said on Thursday, March 10 that JTI, with a cash hoard of RM189m and still growing, it believed the company was likely to pay a special dividend in due course.

'Apart from its recurring annual dividend payout of 30 sen per share, we roughly estimate a possible special dividend amounting to 80 sen per share.

'We are raising our target price for the stock to RM7.30 from RM6.20 previously upon lowering our WACC assumption to 8.32% from 9.4% previously. The stock is upgraded to a BUY from NEUTRAL,' it said.

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