IOI Corporation: Maintain Hold - Hurt by Low Yield, Weak Downstream

• Core FY6/12 profits below expectations. IOI's FY6/12 core net profit of MYR1,827m (-7% YoY) disappointed, dragged by low FFB yields and weak downstream contributions. We lower our FY6/13-14 net profit estimates by 6% and 3%.
• As the stock lacks a short-term catalyst, it remains a HOLD with a revised TP of MYR5.24 (previously MYR5.38) as we roll forward valuation to FY14 but on unchanged 16x PER target.

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Source: Maybank Research - 28 August 2012