- A better 2H but priced in; downgrade to HOLD. After an enlightening meeting with management, we have a better understanding of the lead lag in Bernas' cost recognition from the time of rice procurement. This firms up our view that Bernas should enjoy a better 2H12 relative to 1H12 due to the lower cost rice procured earlier this year. Our DDM based target price of MYR3.40 is unchanged as we roll forward our valuation to 2013 but we downgrade Bernas to a HOLD due to the stock price being close to our target price.
Source: Maybank Research - 24 Sep 2012
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