KUALA LUMPUR: Sime Darby slipped in late morning trade on Thursday, July 29 which could be linked to near-term uncertainty over the probe into the energy and utilities division.

At 11.11am, it was down seven sen to RM7.69 with 636,100 shares done.

CIMB Equities Research had maintained a NEUTRAL recommendation on Sime with a lower target price of RM8.15. It said with the earnings downgrade, it is lowering its sum-of-parts (SOP) based target price from RM8.40 to RM8.15.

“There is no change to our valuation basis of 10% discount to SOP. The discount essentially factors in ongoing concern and uncertainty over corporate governance and the group’s direction,” it said.

CIMB Equities Research said there is no change to its NEUTRAL call on the stock. We are positive on the appointment of a new CEO which could bring positive changes to the group.

“However, this is clouded by near-term uncertainty over the probe into the E&U division, a possible management reshuffle and changes in the group’s strategy,” it said.