Neo Group

Neo Group: CIMB initiates at Buy with TP $0.39, saying Singapore's No.1 events caterer, with a 9% market-share, has room for growth. Expects the co to focus on its plan for a consolidated kitchen to improve efficiency and allow it to take on additional business, possibly in institutional catering; says revenue and net profit will post double-digit growth in FY14 as the benefits from the consolidated central kitchen kick in. CIMB also doesn't rule out the possibility of M&A to grow the business faster. Believes Neo has room to increase selling prices, given its established brand name and quality focus. The co’s plan for a 60% dividend payout ratio for FY13-15 should soothe investment concerns as it translates into FY13-15 dividend yields of 6.7%-11.3%. The stock is up 1.6% at $0.325.