KUALA LUMPUR (Nov 25): CGS-CIMB Securities has maintained its “Hold” rating on Sime Darby Bhd at RM2.30 with a lower target price (TP) of RM2.35 and said the conglomerate’s 1QFY6/23 core net profit missed expectations at 19%/17% of our/consensus’ full year forecasts due to lower-than-expected motors division PBIT margin.

In a note on Friday (Nov 25), the research house said it sees a challenging outlook for Sime in view of the subdued consumer sentiment in China, inflationary cost pressures, and supply chain disruptions.

“We expect Sime to maintain attractive FY23-25F dividend yields of 4.8-5.4%, supported by a potential one-off gain from the Malaysian Vision Valley (MVV) land disposal.

“Sime expects to complete the disposal of 760 acres of MVV land in FY6/23F and register a RM250 million net gain from the planned sale.

“FY23-25F EPS cut by 1-5%. Maintain Hold with a lower TP of RM2.35,” it said.