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Affin IB Research downgrades Felda Global to Add, cuts target price to RM5.16

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Affin IB Research downgrades Felda Global to Add, cuts target price to RM5.16 Empty Affin IB Research downgrades Felda Global to Add, cuts target price to RM5.16

Post by Cals Tue 27 May 2014, 00:30

Affin IB Research downgrades Felda Global to Add, cuts target price to RM5.16
Business & Markets 2014
Written by theedgemalaysia.com   
Monday, 26 May 2014 08:53

KUALA LUMPUR (May 26): Affin IB Research has downgraded Felda Global Ventures Holdings Bhd (FGV) to Add (from Buy) at RM4.60 with a lower target price of RM5.16 (from RM5.66) and said FGV’s 1QFY14 revenue and profit before tax (PBT) were boosted by higher CPO ASP, better OER and the inclusion of results of FHB, moderated by lower FFB and CPO production as well as lower profits from the Sugar and MLO, and losses in Downstream.

In a note Monday, the research house said that adjusted for forex and other one-off items, 1QFY14 core net profit however was below house expectations.

“We cut our FY14, FY15 and FY16 forecasts by11.3%, 9.0% and 3.8% respectively after cutting our estimates for FFB production growth as well as profit contributions from Sugar, MLO and Downstream.

“CPO ASP assumptions remain unchanged at RM2,700/MT for 2014 and RM2,850/MT for 2015-16. Based on the lowered FY15 EPS forecast plus a 4.4 sen enhancement from the investment of its massive cash reserve (RM4,923m as at end-1QFY14) and an unchanged PE target of 16x, target price is cut to RM5.16.

“At current price, we downgrade our rating for the stock from Buy to Add,” it said.
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