CIMB Research maintains Neutral on Hap Seng Plantations

KUALA LUMPUR: CIMB Equities Research is maintaining its Neutral outlook on Hap Seng Plantations as it believes the share price is supported by its enterprise value/hectare (EV/ha) and dividend yield of 3%-4%.
It
said on Wednesday that the EV/ha of RM57,496 was below the recent
transacted market price for estates while other factors are the low
price-to-book value of 1.15 times and decent dividend yield.
“The
first quarter typically sees the lowest production, which is why we
consider Hap Seng Plantations' Q1, 2o13 core net profit as being within
our expectations, at 15% of our full-year forecast. But at 12% of
consensus numbers, it undershot market expectations,” it said.
CIMB Research projected higher earnings in the subsequent quarters, courtesy of higher output and prices.
“As
such, we are keeping our earnings forecasts and target price of RM2.70,
based on a CY14 P/E of 13.5 times, its three-year historical average.
We maintain our Neutral rating as. We prefer First Resources and
Wilmar,” said the research house.