KUALA LUMPUR (Aug 22): Shares in CB Industrial Product Holding Bhd (CBIP) fell 4.35% this morning after Hong Leong IB (HLIB) Research downgraded the stock to a sell at 92 sen and cut its target price (TP) to 78 sen (from RM1).

At 10.46am, CBIP fell 4 sen to 88 sen, with a market capitalisation of RM473.66 million.

In a note today, HLIB Research said CBIP's 1H19 core net profit of RM12.2 million, down 69.3% year-on-year, missed expectations, accounting for only 26.5% to 29.3% of consensus and house full-year estimates.

It said weaker-than-expected performances at palm oil mill engineering and upstream plantation divisions were the key culprits for the disappointing set of results.

"We cut our FY19-21 core net profit forecasts by 23.4%-31.3% to RM31.8 million, RM33.5 million and RM33.2 million respectively, largely to account for lower EBIT (earnings before interest and tax) margin assumption at palm oil mill engineering division, and higher loss assumption at upstream plantation division.

"Post downward revision in core net profit forecasts, we downgrade our rating on CBIP to Sell (from Hold), with a lower sum-of-parts TP on CBIP of 78 sen (vs. RM1 earlier)," the research house said.