Yoma

Yoma: CLSA anticipates headwinds for the group amid political uncertainty from the general election in Nov '15 and a softening property market, but remains optimistic on Myanmar's long term growth.

The uncertain outcome of the Nov '15 general election has broadly weighed on the stock market, with uncertainty exacerbated by the recent termination of Shwe Mann, a possible presidency candicate and Chairman of the ruling Union Solidarity and Development Party (USDP) by Thein Sein, the current President of Myanmar.

Dragging the group further is a softening property market with average ASP lowered to US$207psf in 2Q15 from US$268psf in 1Q15, partially due to rising competition from foreign developers who entered the market over the past two years.

Internally, Yoma is transitioning to a new leadership team with Melvyn Pun , son of Serge Pun who is the largest shareholder with 37% stake taking the helm as CEO of the group. However, the house expects minimal impact from new management as strategic direction of the group is expected to remain unchanged.

Given the challenging macro environment, CLSA has revised its forecast of Yoma's ASP by 10-15% and widen its RNAV discount to 50% from 30%, but the house perceives long-term fundamentals in Myanmar remain positive. Therefore, the house lowered its rating to Outperform from Buy and TP to $0.40 from $0.60.