KIMA LUMPUR (November 22nd): CIMB Research has upgraded Sime Darby Bhd to "Hold" RM2.40 with a target price higher than RM2.50 (from RM2.44) and said the net profit of the group 1QFY6 / 19 in line to 21% of house / consensus estimates FY19.
In a note dated November 21, the research firm said Sime Darby's net profit rose 57% over the previous year in 1QFY19, driven by stronger earnings from its industrial division amid a robust recovery mining in Australia.
"We withdraw our valuation and improve Sime to Hold, taking into account its attractive growth prospects in the industrial segment and the recent withdrawal of stock prices.
"The stronger gains in the industrial segment and the acquisition of gains are potential re-rating catalysts, while lower car sales than expected and profit margins are potential stock-rating catalysts."
At 9.19, Sime Darby earned 0.83% or 2 sen to RM2.42, with 4,900 shares executed.