Tat Hong

Tat Hong: CIMB maintains O/p with $1.75 TP. House note that TAT Hong’s recent share-price weakness is reminiscent of its mid-Apr fall. But this time around, believe sentiment is the cause. Its crane-rental division is still strong in all key markets, though there is some translation impact from its Australia-barricaded distribution division. House conservatively lower FY14-16 EPS by 2-4% for lower Australian contributions from A$ weakness. Accordingly, lower target price, still at 11x CY14 P/E (its 5-year average forward P/E). Reiterate Outperform with strong Asian operations still its main catalyst while potential M&As could provide icing on the cake.