Hong Leong Asia

DBSV downgrades Hong Leong Asia to Hold, cuts TP to $4.54 from $5.67 after reducing earnings forecasts for both FY10-11 by 19% to assume lower revenue growth, margins for China units Xinfei, Yuchai amid challenging prospects; expect rising raw material costs and rising inventory levels at the distributors to erode margins of Yuchai and Xinfei for the rest of the year as demand is projected to slow amid credit tightening and a weaker property market in China.