Alliance cuts KLK's earnings forecast

Alliance Research has cut Kuala Lumpur Kepong Bhd's earnings forecast for the 2013 financial year by 11.7 per cent in
anticipation of lower full-year crude palm oil (CPO) average selling price.

The
research house has lowered its full-year CPO average selling price for
Kuala Lumpur Kepong to RM2,400 per metric tonne from RM2,600 per metric
tonne previously.

"The group's net profit was 13.5 per cent lower year-on-year at RM209.7 million for the second quarter ended March 31, 2013.

"The
weaker performance was due to lower-than-expected average selling price
of CPO at RM2,143 per metric tonne, compared with the Malaysian Palm
Oil Board's RM2,326 per metric tonne," Alliance Research said in a note.

Meanwhile,
RHB Research has revised its forecast downward by 17-24 per cent for
the group's 2013-2015 financial years, after taking into account the
recent sector-wide downgrade in CPO price assumptions.

"We now
assume CPO prices of RM2,400 per tonne for FY13 (from RM2,700), RM2,550
per tonne for FY14 (from RM2,900) and RM2,600 per tonne for FY15 (from
RMR3,000)," it said in a separate note today.

Both research
houses maintained their 'neutral' call on the stock, whereby Alliance
Research placed a RM19.80 target price on Kuala Lumpur Kepong, while RHB
Research pegged it at RM21.30.-- Bernama