KUALA LUMPUR (Aug 21): CIMB IB Research has downgraded Kawan Food Bhd (Kawan) to “Hold” at RM4.70 with a lower target price of RM4.62 (from RM5.15) and said Kawan’s 1H17 net profit was below house and Bloomberg consensus expectations at 32% of full-year forecasts, mainly due to weaker-than-expected export sales.
In a note Aug 20, the research house said Kawan had RM43.2 million net cash or 16 sen net cash per share as at end-June 2017.
“FY17-18F EPS cut to reflect slower export sales outlook.
“The stock has risen 24% year-to-sate; current valuation not cheap at 20.4x 2018F P/E.
“Downgrade from Add to Hold, first downgrade since our Jun 2015 initiation,” it said.