Hot Stock TSH jumps 5.86% on firm 3Q earnings

by **Cals** Wed 20 Nov 2013, 18:38

Hot Stock TSH jumps 5.86% on firm 3Q earnings

Business & Markets 2013

Written by Zatil Husna of theedgemalaysia.com

Wednesday, 20 November 2013 10:07

KUALA LUMPUR (Nov 20): TSH Resources Bhd rose as much as 5.86% on the back of its firm earnings for the third quarter ended Sept 30 (3Q13), as well as backed by an upgrade by Hong Leong IB Research.

At 9.43am, the stock rose to RM2.89, up by 16 sen from RM2.73 with some 545,800 shares done.

Hong Leong IB research has upgraded the stock to ‘hold’ call from ‘sell’ with a revised upward target price (TP) of RM2.58 based on strong fresh fruit bunches (FFB), stable cash flow from alternative power plant, improving net gearing ratio and favourable long term outlook of the oil palm business.

The research firm said in its note today that TSH’s nine months (9M13) earnings beat expectations, rising 51.3% to RM87.3 million, which accounted for 96-98.8% of consensus and full-year forecast.

“Despite a double-digit decline in realized average CPO price, 9M13 core net profit grew 51.3% to RM86.2 million due to higher FFB production, which has resulted lower production costs in plantation division, lower operating costs in wood product segment and improved joint venture (JV) contributions.

“Lower finance cost and reinvestment allowances, which result in lower tax expense also contributed to the improved earnings,” it said.

The research house has raised TSH’s FY13-FY14 net profit forecasts raised by 26.8-39.5% to RM121.1 million, RM147.7 million and RM156.9 million respectively, largely to account for lower production cost assumptions.