CIMB Equities Research is maintaining a NEUTRAL recommendation on SIME DARBY BHD [] with a lower target price of RM8.15.
It said on Thursday, July 29 that in line with the earnings downgrade, it is lowering its sum-of-parts (SOP) based target price from RM8.40 to RM8.15.
“There is no change to our valuation basis of 10% discount to SOP. The discount essentially factors in ongoing concern and uncertainty over corporate governance and the group’s direction,” it said.
CIMB Equities Research said there is no change to its NEUTRAL call on the stock. We are positive on the appointment of a new CEO which could bring positive changes to the group.
“However, this is clouded by near-term uncertainty over the probe into the E&U division, a possible management reshuffle and changes in the group’s strategy,” it said.
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