Stock Downgraded: Man Wah downgraded to neutral by CIMB-GK

Man Wah downgraded to 'neutral' - CIMB-GK CIMB-GK Research said it has downgraded its rating on Man Wah Holdings Ltd to "neutral" from "outperform" after the Hong Kong-based sofa maker sold 43 mln new shares at 0.56 sgd per share via a placement. The net proceeds from the placement of 23.18 mln sgd will be used to fund the group's expansion plans. CIMB-GK said it has also lowered its fair value for Man Wah to 0.63 sgd per share from 0.71 sgd previously as the the placement will dilute earnings per share (EPS) estimates for the year to March 2007 through 2008 by about 15 pct. "Man Wah's share price has done well recently, rising almost 32 pct in the last month. The company is trading at a 9.5 times prospective (2006) price earnings ratio, at the high end of its historical trading band," CIMB-GK said. "With only 5 pct upside to our target and no near-term catalysts, we are downgrading our recommendation from 'outperform' to 'neutral'," it said. At 9.05 am, Man Wah was down 0.01 sgd or 1.67 pct at 0.59 with 657,000 shares traded.