Kencana Agri: 2Q11 results below expectations.
Despite better than expected production growth, earnings fell short on cost factor and lower than expected ASP.
DMG maintains Buy but reduce TP to $0.46 to reflect lower earnings forecast. Despite reduced TP, continue to believe that Kencana is one of the best growth stocks in the sector, one which is going through some growing pains. Its strong cash flow generation from significantly higher production this year will help to fuel its expansion plans.
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