That Silver Birdie .. Part VI

Just saw that Standard and Poors had downloaded their research report on Silver Bird on Bursa Malaysia's Research website.

In that article, Standard and Poors have downgraded Silver Bird to a Hold (from Buy)

• We are downgrading our recommendation on Silver to a Hold (from Buy), given the limited upside to our revised 12-month target price of MYR0.71 (from MYR0.73 previously). Based on revised earnings,
  Silver is trading at PERs of 9.3x FY06 and 7.9x FY07, which are at significant discounts to the market, the consumer sector and its peers.
  However, on a fully diluted basis (for full warrants conversion), Silver’s PERs are, in our opinion, now at fair levels of 13.9x FY06 and 11.7x FY07.
  · We attribute a fair PER of 13.5x to Silver’s FY06 fully diluted EPS, based on a 10% discount to updated average market PER. After including our net DPS forecast at MYR0.02 for FY06, we arrive at our target price of MYR0.71.
  · We remain concerned with Silver’s high net gearing level of 76% as at 1QFY06. Silver’s answer is to sell some of its extra pieces of land in Nilai and other parts of Negeri Sembilan. It recently entered into a sale and leaseback agreement with Amanah Raya Berhad for its plant and office building in Shah Alam for an estimated MYR93 mln. As such, we expect its net gearing to fall to 60-70% over the next few
  years. Interest cover remains manageable at 5-6x.
  · Risks to our recommendation and target price include the possibility of smaller-than-expected start-up losses in SBI and a shorter period to breakeven point for its operations.

And the most interesting note is that Standard and Poors earnings estimate for fy 2006 to just 16.4 million.

OSK estimates? 47.4 million!!!

And let me repeat myself yet again...

Oh... what I find so strange is that after their over whelming bullish write-up on Aug 2005, OSK did not have a follow-up article on Silver Bird.

I really wonder why... perhaps that little birdie just flew up, up and awayyyyyyy....

:p