KUALA LUMPUR (Feb 26): CIMB IB Research has maintained its “Reduce” rating on Lafarge Malaysia Bhd at RM5.29 with a lower target price (TP) of RM4.85 (from RM6.26) and said Lafarge’s FY17 net loss of RM215 million was worse than house and consensus forecasts.

In a note Feb 25, the research house said for the first time, operating cost was higher than revenue, which dropped 12% year-on-year.

“Price competition still a drag on cement segment, no room to pass on higher cost.

“Expect operating conditions to be tough. FY18-19F EPS slashed; introduce FY20F.

“Maintain Reduce with a lower RM4.85 TP based on a lower 1.46x FY18F P/BV,” it said.