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ISOTeam cut to 'neutral' by RHB on margins pressure

PC Lee
PC Lee2/18/2019 12:07 PM GMT+08  • 2 min read
ISOTeam cut to 'neutral' by RHB on margins pressure
SINGAPORE (Feb 18): Margins pressure is forcing RHB Research to downgrade ISOTeam to “neutral” with a lower target price of 23 cents from 42 cents previously despite the latter achieving a record order book.
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SINGAPORE (Feb 18): Margins pressure is forcing RHB Research to downgrade ISOTeam to “neutral” with a lower target price of 23 cents from 42 cents previously despite the latter achieving a record order book.

RHB is lowering its FY19F-22F PATMI by 63%, 51%, 43% and 29% as margins continue to decrease due to competitive pricing although management is said to be looking for means to lower its costs and has taken up steps to consolidate and streamline its business units.

“We are adopting a wait-and-see approach in the meantime as there could be some upside potential from improved margins from new contracts, successful cost optimisation and unlocking value from the sale of Kaki Bukit and Serangoon properties,” says lead analyst Lee Cai Ling, “The key risk to our forecasts is price competition, which could lead to even lower margins.”

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