Eu Yan Sang

Eu Yan Sang: CIMB maintains its Reduce rating , lowers TP to $0.68 (from $0.74) , based on 16.7x FY15e P/E. Despite the first quarter being historically the slowest, CIMB deems EYS results to be below expectations , as core earnings formed just 1.2% of its FY15 forecast (1QFY14: 9.4%). The Occupy Central movement in HK has led to lower Chinese tourist arrivals and the house believes 2QFY15 revenue will be impacted (HK accounts for 46% of sales). Coupled with cost pressures and investments into F&B in China, and the inevitable foray into e-commerce, the house believes operating costs will eat into profits in the short term.