"We think the present value rivalry may endure for another six to nine months. While consecutive income may enhance lower costs, it will at present be a long way from its topped quarterly profit. Post our profit per offer cut, Lafarge exchanges at costly 27 times 2017 PER and offers profit yield of 3.1% for the present year," it said.
Maybank said rivalry had hardened as YTL Cement's new limit hit the business sector in the principal quarter 2016. Furthermore, development movement was additionally slower in the main quarter on the planning confuse of the base activities and a gentler property market.
"We think the present aggressive environment will persevere for another 6-9 months given the business' high limit development and development movement may just get in second 50% of 2016," it said.
Be that as it may, Maybank said Lafarge's expenses could be consecutively lower as the Lafarge-Holcim joining expense could be less in second quarter, with the vast majority of the incorporation exercise done, repair and support expense to be occasionally lower and lower coal cost.
"These cost investment funds ought to more than balance for the higher deterioration accuses in front of the initiation of Lafarge's new bond factory (Rawang: 2Q16, Kanthan: 4Q16; LMC's concrete ability to increment by 8% to 15mmt for every anum.)," it said.
"While we believe Lafarge's profit could recuperate progressively from second quarter on the lower costs, it could even now miss the mark concerning our prior conjectures. We cut our FY16-18 EPS by 22%/11%/10% on lower normal offering costs, joining expense of RM15mil in FY16 and higher misfortune at its partner in Singapore, in perspective of the delicate property market in Singapore.
"Our profit per offer is additionally lessened to 25sen for FY16 (from 31sen; 100% payout), demonstrating 3.1% yield," Maybank said