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Felda Global rated 'underperform' (5222)
by hlk Fri 29 Jun 2012, 18:25
Macquarie Securities started coverage of palm oil company Felda Global
Ventures Holdings with an "underperform" rating and a target price of
RM3.85 based on the firm's unfavourable tree age and rising downstream
competition.
Macquarie said in a note to clients that while
local funds supported the stock's debut on Thursday, research showed
there could be a 27 percent downside to the share price.
Felda
surged 20 percent in its trading debut as investors cheered on he
world's second largest IPO this year with share prices going as high as
RM5.46.
Macquarie said Felda Global's current fresh fruit
bunch (FBB) yield is 15 percent lower than listed competitors with more
than half of its estates at over 20 years old.
Increased competition from Indonesia and a reversal of abnormally high margins in 2011 may also weigh on profitability.
Shares in Felda Global fell 0.4 percent to RM5.28 on Friday,
underperforming the broader market that inched higher. -- Reuters
Ventures Holdings with an "underperform" rating and a target price of
RM3.85 based on the firm's unfavourable tree age and rising downstream
competition.
Macquarie said in a note to clients that while
local funds supported the stock's debut on Thursday, research showed
there could be a 27 percent downside to the share price.
Felda
surged 20 percent in its trading debut as investors cheered on he
world's second largest IPO this year with share prices going as high as
RM5.46.
Macquarie said Felda Global's current fresh fruit
bunch (FBB) yield is 15 percent lower than listed competitors with more
than half of its estates at over 20 years old.
Increased competition from Indonesia and a reversal of abnormally high margins in 2011 may also weigh on profitability.
Shares in Felda Global fell 0.4 percent to RM5.28 on Friday,
underperforming the broader market that inched higher. -- Reuters
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