SINGAPORE (June 3): Phillip Capital is downgrading its recommendation on Penguin International to “accumulate” from “buy” with a lower target price of 55 cents from 88 cents previously.

This came following Penguin's business update in its recent AGM, which forecasted a challenging outlook due to the Covid-19 pandemic and the collapse in oil prices.

In a Wednesday report, analyst Paul Chew says, “The biggest worry will be trade receivables and inventory of vessels built to stock. During such a stressed environment, the risk will be elevated from customers defaulting payments and inventory becoming unsold.”

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