KUALA LUMPUR (Aug 27): Tomypak faces continued margin pressure ahead, Maybank Kim Eng says after 2Q earnings came in sharply weaker on year and below consensus, prompting the brokerage to downgrade the Malaysian food-packaging group to sell from hold. 

Although going forward core earnings are expected to be supported by new overseas sales orders, operational cost savings and the utilization of a reinvestment tax allowance, Maybank KE expects the need to maintain competitive pricing will erode Tomypak's profit margin further. 

Maybank cuts its target on Tomypak to 23 sen from 49 sen.