Stock Name: TAANN
Company Name: TA ANN HOLDINGS BHD
Research House: AMMB
KUALA LUMPUR: AmResearch initiates coverage on the timber sector with an OVERWEIGHT stance, recommending a BUY on JAYA TIASA HOLDINGS BHD [] and a HOLD on TA ANN HOLDINGS BHD [] with fair values of RM6.00/share and RM5.61/share, respectively, based on a PE of 15x.
It said on Monday, Feb 14 its recommendations are based on the timber price recovery; structural transformation, and potential reclassification and its stance is underpinned by the 'high-octane growth' in their oil palm business.
As of FY10, the oil palm division accounted for about 45% of Jaya Tiasa's pre-tax profit versus only 6% in FY06, while as of its FY09, oil palm earnings of RM37mil represented 40% of Ta Ann's pre-tax profit compared with a mere 1.4% in FY06. Jaya Tiasa's and Ta Ann's fair values are based on a PE of 15x their FY11F EPS of 40 sen and 37.4 sen, respectively.
To account for their oil palm segment's growing prominence, with timber to boot, the fair PE is at the high end of the PE range of the small capitalisation PLANTATION [] companies under our coverage but just a notch below IJM PLANTATIONS BHD []'s (IJMP) fair PE of 16x.
Company Name: TA ANN HOLDINGS BHD
Research House: AMMB
KUALA LUMPUR: AmResearch initiates coverage on the timber sector with an OVERWEIGHT stance, recommending a BUY on JAYA TIASA HOLDINGS BHD [] and a HOLD on TA ANN HOLDINGS BHD [] with fair values of RM6.00/share and RM5.61/share, respectively, based on a PE of 15x.
It said on Monday, Feb 14 its recommendations are based on the timber price recovery; structural transformation, and potential reclassification and its stance is underpinned by the 'high-octane growth' in their oil palm business.
As of FY10, the oil palm division accounted for about 45% of Jaya Tiasa's pre-tax profit versus only 6% in FY06, while as of its FY09, oil palm earnings of RM37mil represented 40% of Ta Ann's pre-tax profit compared with a mere 1.4% in FY06. Jaya Tiasa's and Ta Ann's fair values are based on a PE of 15x their FY11F EPS of 40 sen and 37.4 sen, respectively.
To account for their oil palm segment's growing prominence, with timber to boot, the fair PE is at the high end of the PE range of the small capitalisation PLANTATION [] companies under our coverage but just a notch below IJM PLANTATIONS BHD []'s (IJMP) fair PE of 16x.
No comments:
Post a Comment