SINGAPORE (Oct 26): CIMB is hanging on to its “hold” call for GL Limited with the same target price of 86 cents after cutting its FY17 earnings forecast by 5% to US$44.14 million ($61.3 million) as it expects lingering Brexit risks to hurt the group’s hotel and gaming earnings.
To recap, for the 1QFY17 to Sept, GL’s earnings fell 67% to US$11 million on the back of a one-off legal provision expense of US$8.5 million. Revenue also fell 15% to US$97.8 million from translation losses for its UK businesses.
In a Wednesday note, CIMB analysts Roy Chen and William Tng say the group’s core earnings for the seasonally strong quarter still accounted for 43% of its full-year forecast. They note that core earnings in its hotels business had improved from the previous quarter as the weaker GBP boosted inbound tourism and partially mitigated the translation losses.
