Stock Name: GNEALY
Company Name: GLENEALY PLANTATIONS (M) BHD
Research House: OSK
Company Name: GLENEALY PLANTATIONS (M) BHD
Research House: OSK
Glenealy Plantations (Malaya) Bhd is bound to see strong production growth at least for the next few years, in view of its young age profile and further expansion plans in Indonesia, says OSK Research.
"We are initiating coverage on Glenealy with a 'buy' rating and a 12 months fair value of RM6.05," the research firm said in note today.
Glenealy has a planted area of 28,537 hectares in Sabah and Sarawak and its trees are largely young, with 51 per cent at or younger than five years, based on June 30, 2010 figures.
The research firm said 60 per cent of the company's trees are below peak production age, so there is ample room for fresh fruit bunch (FFB) production growth moving forward.
Glenealy currently has about 11,000 hectares of plantable area in Kalimantan Timur, of which about 2,000-3,000 hectares will be planted annually.
Together with another 2,000-3,000 hectares annual planting in Sarawak, it will bring the company's planted area expansion to about 4,000-6,000 hectares per annum.
This,OSK said, will fuel planted area growth by 15-22 per cent for this financial year and by 13-18 per cent for the next.
"We estimate Glenealy to register double-digit FFB production growth of between 11-15 per cent in financial year 2012-2013," it added.
OSK said should the company plant at a more aggressive 6,000 hectares annual rate, it expects the financial year 2014-2016 FFB production CAGR to be 10 per cent.
It said production will remain stagnant starting in 2014 if the company chooses not to expand its existing planted area (zero new planting).
Glenealy has recorded steady production growth for the past decade, rising from 207,334 tonnes in 2001 to 316,667 tonnes in 2010, which represents a five per cent CAGR. -- Bernama
"We are initiating coverage on Glenealy with a 'buy' rating and a 12 months fair value of RM6.05," the research firm said in note today.
Glenealy has a planted area of 28,537 hectares in Sabah and Sarawak and its trees are largely young, with 51 per cent at or younger than five years, based on June 30, 2010 figures.
The research firm said 60 per cent of the company's trees are below peak production age, so there is ample room for fresh fruit bunch (FFB) production growth moving forward.
Glenealy currently has about 11,000 hectares of plantable area in Kalimantan Timur, of which about 2,000-3,000 hectares will be planted annually.
Together with another 2,000-3,000 hectares annual planting in Sarawak, it will bring the company's planted area expansion to about 4,000-6,000 hectares per annum.
This,OSK said, will fuel planted area growth by 15-22 per cent for this financial year and by 13-18 per cent for the next.
"We estimate Glenealy to register double-digit FFB production growth of between 11-15 per cent in financial year 2012-2013," it added.
OSK said should the company plant at a more aggressive 6,000 hectares annual rate, it expects the financial year 2014-2016 FFB production CAGR to be 10 per cent.
It said production will remain stagnant starting in 2014 if the company chooses not to expand its existing planted area (zero new planting).
Glenealy has recorded steady production growth for the past decade, rising from 207,334 tonnes in 2001 to 316,667 tonnes in 2010, which represents a five per cent CAGR. -- Bernama
No comments:
Post a Comment