Super: Daiwa reaffirmed its Underperform rating on Super and lowered its TP from $0.79 to $0.73, the lowest on the street, as macro concerns continue to be a drag on the group.
The house cited that in light of a weakening regional currencies environment, Super's price competitiveness has been affected, particularly in the instant coffee segment, allowing local competitors to gain market share.
Further, performance in Super's second largest market, Myanmar, has been impacted by severe floods since Jul.
Recent initiatives which include new product launches and Super's partnership with Italian coffee brand, Cafe Cagliari, are only expected to contribute meaningfully in 4Q15 onwards.
Due to the poor earnings visibility, Daiwa lowered its earnings forecasts by 5-8% for FY15-FY17, and based its TP on a 15x P/E ratio, a 20% discount to Super's 6-year historical mean.
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