He believes that softness in diamond end markets could trickle down to the midstream, which could dampen Sarine’s revenue. “Nonetheless, the weakness in the west could be partially mitigated by post-Covid recovery in China, which accounted for 15%-20% of end-market demand pre-Covid,” Mittal adds.
DBS Group Research analyst Sachin Mittal has downgraded Sarine Technologies (SGX:U77
) to ‘fully valued’ with a lower target price of 33 cents from 47 cents previously on softer diamond demand.
In his Feb 28 report, Mittal notes that the US demand — which accounts for roughly half of the global diamond demand — is likely to lean towards cautiousness on the back of a sluggish macroeconomic outlook. Retailers are now more hesitant in purchasing high levels of inventory, while midstream manufacturers are holding on to higher levels of polished inventory whilst maintaining low production.
