CIMB downgraded Sime Darby to Reduce from Add after resuming coverage of the stock post-demerger.
”We think the market has priced in the improving prospects of its businesses and its plan to create shareholder value, post demerger,” CIMB said in a note on Wednesday, adding it believed the stock’s valuations were “rich” after it rose nearly 50 percent from its late-November relisting reference price of 1.85 ringgit.
CIMB cut its target to 2.42 ringgit from 10.22 ringgit and lowered its fiscal 2018-2020 core net profit forecasts by 60-67 percent to reflect the demerger of the plantation and property segments.
The demerger left Sime Darby as a global trading and logistics player, which was set to benefit from higher coal prices and Asia Pacific’s growth, CIMB said.
The stock was up 0.73 percent at 2.77 ringgit at 2:12 P.M. SGT.