Friday, February 8, 2013

Petrafoods

Petrafoods: CIMB downgrades to Neutral from O/P with $3.77 TP. Note that Petra issued a warning of 4Q12 losses. Main culprits were a margin deterioration for cocoa ingredients and one-off charges relating to the division’s disposal. Full yr, the group remains profitable with the help of its branded consumer business. House slash FY12 EPS by 60%. Longer term, this blip does not detract from Petra’s growth, which will now stem solely from branded consumer once the cocoa-ingredients disposal is over. No change to SOTP. Valuations appear rich following the stock’s 20% appreciation since our Dec upgrade, prompting house to downgrade it from Outperform to Neutral.

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