PhillipCapital’s head of research Paul Chew has downgraded his recommendation on Micro-Mechanics Holdings to “neutral” from “accumulate” on stretched valuations.
Chew has, however, upped his target price on the counter to $3.35 from $2.93, as he increases FY2021 ex-cash price-to-earnings (P/E) from 18 times to 21 times, in line with its peers.
“Recent share-price rally has priced in its positive outlook and long-term merits such as 4% yields, 35% ROEs and a net-cash balance sheet,” says Chew on the recommendation downgrade in a Feb 8 report.
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