Maybulk Is Cut To Underperform Target Price of 1.80

Saw the following note on Dow Jones News wire.

• Credit Suisse downgrades Maybulk (5077.KU) to Underperform from Neutral, cuts target to MYR1.80 from MYR3.80; this after reducing Baltic Drybulk Index (BDI) FY08 forecast by 64% to 2500 and FY10 by 70% to 1500. As a result, cuts Maybulk net profit estimate by 15%-56%, dividends reduced in FY09 by 50% and FY10 by 73%, lowering yields to 5.9% in FY09 and 3.2% in FY10. Analyst Annuar Aziz also turns mildly cautious following company's proposed $221 million related party transaction to buy 22% stake in PACC Offshore Services as no future profitability disclosed. Shares +6% at MYR2.49.

Cuts target to only rm 1.80.

Justifiable? BDI at this moment of time is below 900.

Secondly, that PACC thingee. It's a related party transaction. RELATED.

And when no future profitability is disclosed, analyst Annuar Aziz does have a very strong point, a $221 million point, yes?

Do you like related party transactions?

I don't! I just cannot stand all this related party transactions!