CIMB Research cut its target price on commodity trading firm
Noble Group Ltd to S$1.45 from S$1.61 and kept its
'outperform' rating, citing worse-than-expected earnings and
poor performance in its agriculture business.
By 0239 GMT, Noble shares were down 7.8 percent to a
two-month low, with over 93 million shares traded, 3.2 times its
average daily volume over the last five sessions. Its shares
have gained 4 percent since the start of the year, compared to
the 13.7 percent rise in the Straits Times Index.
"Unlike its global peers Bunge and Cargill, Noble failed to
ride on the tailwinds of improving agribusiness dynamics," said
CIMB in a report.
Despite Noble's new sugar assets and peak harvesting season,
its agriculture revenue fell 34 percent from a year earlier,
which the management blamed on poor China crush margins and
volatile corn and soybean prices.
Higher depreciation in its new sugar mills also dampened
Noble's profit margins, while operating expenses were
higher-than-expected, CIMB noted.
While the brokerage expects near-term share price weakness
for Noble, it maintained its 'outperform' rating due to its
positive long-term growth plans.