KUALA LUMPUR (Nov 27): Kenanga IB Research has upgraded Oldtown Bhd to Market Perform at RM1.65 with a lower target price of RM1.76 (from RM1.90) and said Oldtown’s 1H15 net profit of RM23 million (-2.6%) was within house expectation but below the consensus’.

In a note Thursday, the research house said the numbers accounted for 45.6% of Kenanga IB’s in-house forecast but only 43% of the street’s estimate.

On the outlook for the stock, the research house said it remains cautious in view of the continuous soft consumer sentiments which has negatively affected the performance of both its CC and BM segments.

“We do not expect to see a quick turnaround in the local market, which contributed more than 70% in sales revenue with the consumer spending being restricted by the higher living cost environment. 

“Going forward, more gravity or focuses will be shifted to overseas market as the Group plans to strengthen its regional presence via new café outlets openings with 2- 3 new outlets targeted to be opened in Singapore while another 6-8 to be opened in Indonesia,” it said.