Affin Hwang Capital downgrades Cycle & Carriage, cuts target to RM1.48

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KUALA LUMPUR (Dec 4): Affin Hwang Capital Research has downgraded Cycle & Carriage Bintang Bhd (CCB) to “Sell” at RM1.85 with a lower target price of RM1.48 (from RM2) and said CCB will cease to be the 49%-stake shareholder in Mercedes-Benz Malaysia SB (MBM) as Daimler AG (owns 51%-stake in MBM) looks to acquire the remaining stake for RM66 million.

In a note today, the research house said it was negative on this disposal, as it will strip off CCB’s recurring dividend income of RM11.2 million.

“As such, we slash our EPS forecasts by 38-57% in FY19-20E and cut our target price to RM1.48 from RM2.00, based on 0.5x CY19E book value.

“Downgrade to Sell,” it said.