S&P Research Ups Degem To Strong Buy, Keeps Target

S&P Equity Research ups Degem (7119.KU) to Strong Buy from Buy on recent share price weakness, keeps MYR1.43 target; jeweler reported above-expectation 1Q net profit of MYR3.5 million (+55% on-year) on increased sales, better margins. S&P ups FY07 net profit forecast 12.2% to MYR12.9 million; "we remain optimistic on Degem's outlook." Move to set up new stores in Malaysia, Singapore, Vietnam next 2 years should boost revenue, profits. Stock +1.7% at MYR1.22 yesterday.