It recently turned in a first-half net profit of RM17 million, which was way below what the research house expected.
The first-half earnings covered only 24 per cent of the RM71 million full-year profit that was previously guided by the management, it said.
The underperformance was attributed to a weaker-than-expected contribution from its rail job in Mumbai and from its oil-field services unit.
"The downgrade is premised on yet another weak earnings delivery although we believe strong news flows from potential new monorail jobs could support this stock," AmResearch said in a note to clients two days ago.
It cut its fair value for Scomi to 45 sen from 80 sen before. It also cut its earnings estimates for the group for the 2010 to 2012 fiscal years by between 38 per cent and 48 per cent. It noted that Scomi is currently trading at a premium to its three-year historical average, which is unjustified given its consistent poor earnings delivery.- Business Times
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