KUALA LUMPUR (Nov 5): CIMB Research has maintained its Hold rating on Tasek Corporation Bhd at RM17 with a higher target price of RM16.85 (from RM15.30) and said although Tasek's annualised 9M14 core net profit was 102% of house forecast, it was deemed broadly in line as the research house expects intensified price competition and sustained cost pressures in 4Q.
In a note Nov 4, CIMB Research said the main positive was the higher special interim single-tier DPS of 50 sen in conjunction with the group's 50-year anniversary but said this was unlikely to be sustained.
“We raise our FY14 DPS forecast. Our target price rises as we roll over to an end-FY15 valuation and apply a higher P/BV multiple of 1.94x (unchanged 10% discount to Lafarge's historical 1-year P/BV).
“We maintain our Hold rating, with support from Tasek's decent FY14-16 dividend yield of 4-5%.
“We prefer contractors as they will be earlier beneficiaries of the infrastructure job rollout,” said CIMB Research.
At 9.18am, Tasek rose 0.47% or 8 sen to RM17.08 with 1,000 shares done.