SINGAPORE (June 20): RHB Research is upgrading its call on Delfi to “buy” from “neutral” on attractive valuations as the counter closed Tuesday at $1.32, which is 27 times FY18F earnings.

The upgrade comes despite a lower target price of $1.47 from $1.54 as a result of lower gross margin forecasts, with a 4% and 2% reduction to FY19-20F EPS after factoring in RHB’s forecasts for USD/IDR to average at 14,100 for 2018, as well as rising cocoa prices.

This is because Delfi is now trading close to its five-year low of $1.28, and below its historical average of 35 times historical P/E with undemanding valuations compared to its peers in Indonesia and Philippines.  

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