KUALA LUMPUR (June 26): CIMB IB Research has downgraded Syarikat Takaful Kelurga Malaysia Bhd (STKM) to “Reduce” at RM7.01 with an unchanged target price of RM6.50 and said it downgraded STMK from Add to Reduce as we think that the stock is overvalued at one-year forward P/E of 15.3x and P/BV of 5.3x.

In a note June 25, the research said it sees limited scope for further increase in EPS forecasts as it has factored in strong FY19F EPS growth from the new partners’ contributions.

“We expect EPS growth to normalise to mid-to-high single-digits in 2H19F as Bank Raykat contributions started in 3Q18,” it said.