Faber falls on non-renewal of contracts (Edge)

Shares of FABER GROUP BHD [] fell in early trade on Thursday, Jan 13 following news of the non-renewal of two Abu Dhabi contracts with an estimated value of RM184 million per annum.

OSK Research downgraded Faber to a Trading Buy and lowered its sum-of-parts (SOP) valuation from RM4 to RM3.39.

It said the downgrade followed the non-renewal of two contracts of Faber’s Abu Dhabi-based subsidiary Faber Ltd Liability Co. (FLCC).

“Despite the still-sizeable price upside, we are downgrading our recommendation from BUY to Trading Buy, largely because non-renewal of the contracts will dampen sentiment and create some uncertainty over the fate of Faber’s existing concession in Malaysia,” it said.