Medium-term positive. KLK's plan to dispose its underperforming retail business Crabtree & Evelyn (C&E) for a one-off RM123m disposal gain (or ~11.5sen/sh) is positive. The RM465m cash proceeds from the disposal will be redeployed towards its raised c.RM1b planned capex in FY12. Our new forecasts adjust for C&E's disposal and new capex guidance. We tweak our TP to RM20.00 (previously RM19.60) on unchanged 16x FY13 PER. Maintain Sell for its steep valuation.

Maybank Research - 21 March 2012

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