Stock Downgraded: SMY price target reduced to 0.725 by CIMB-GK!

CIMB-GK Research said it has cut its target price for Surface Mount Technology (Holdings) Ltd (SMT) to 0.725 sgd from 0. 79 sgd because of its weaker earnings outlook. "We have cut our full-year 2007-2008 forecasts by 6-9 pct to factor-in slightly higher operating expense assumptions," CIMB-GK said in a note to clients. The brokerage is keeping its "outperform" rating for SMT because of its bright business prospects, but said the company needs to monitor escalating costs. "To combat cost pressure (higher energy prices and wages), SMT will continue to re-engineer its manufacturing processes and production flow," CIMB-GK said. At 10.40 am, SMT was flat at 0.52 sgd, on volume of 154,000 shares.