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JF Apex Securities maintains Buy on Genting Plantations, lowers target price to RM11.40

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JF Apex Securities maintains Buy on Genting Plantations, lowers target price to RM11.40 Empty JF Apex Securities maintains Buy on Genting Plantations, lowers target price to RM11.40

Post by Cals Thu 28 Aug 2014, 18:17

JF Apex Securities maintains Buy on Genting Plantations, lowers target price to RM11.40
Business & Markets 2014
Written by theedgemalaysia.com   
Thursday, 28 August 2014 08:42

KUALA LUMPUR (Aug 28): JF Apex Securities Research has maintained its Buy rating on Genting Plantations Bhd with a lower target price of RM11.40 and said the Group’s core net profit of RM164.5mil in 6MFY14 was 32.4% higher than a year ago, thanks to higher crop production and the improved CPO selling prices.
In a note Thursday, the research house said Genting Plantations’ fresh-fruit-bunches (FFB) production in 6MFY14 grew 11.4% year-on-year (y-o-y), mainly due to the improved FFB yield in its oil palm planted area in Indonesia as more oil palm planted area comes into maturity and existing harvesting areas progressed into higher yielding brackets.
Meanwhile, average CPO selling prices of RM2619/mt in 6MFY14 were 13% higher than a year ago,” it said.
“We revise downwards our FY14-15F earnings forecast by 11-14% to factor in the higher operating expenses and to reflect our sector wide downward revision of CPO price assumptions. CPO price assumptions for CY14 and CY15 are now at RM2450/mt and RM2650/mt respectively.
“We remain positive on the Group’s earnings outlook, banking on its Indonesian ventures, as its Indonesian ventures start to make positive contribution. The exciting crop production growth would also mitigate the negative impact of the plunge in CPO selling prices,” it said.
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