December 6, 2010

KLK - KLK surges, OSK ups target price to RM20.50

Stock Name: KLK
Company Name: KUALA LUMPUR KEPONG BHD
Research House: OSK

KUALA LUMPUR: KUALA LUMPUR KEPONG BHD []'s (KLK) share price advanced in early trade on Monday, Dec 6 in thin trade while OSK Research raised its target price to RM20.50 from RM18.50.

However, its share price overshot the TP, surging 52 sen to RM21.90 with 1,700 shares done at 9.09am. KLK's major shareholder Batu Kawan climbed 12 sen to RM16.42.

The FBM KLCI rose 3.18 points to 1,504.16. Turnover was 38.86 million shares done valued at 42.45 million. There were 124 gainers, 33 losers and 84 stocks unchanged. Genting PLANTATION []s added 20 sen to RM8.80.

OSK Research said the young age profile of KLK's plantations should drive its production at double-digits. The weaker than expected performance in FY10 should be followed by a stronger FY11 output.

'Our forecast for FY11 is raised to RM1.20 billion from RM1.059 billion previously, factoring in a stronger production and average CPO price of RM2,700. Our target price is raised from RM18.50 to RM20.50 based on 18 times CY11 earnings. Maintain Neutral,' it said.


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