Strong Indonesian FFB growth ahead

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: MIDF

Price Call: HOLD

Target Price: 10.10

Big boost in land bank

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: MIDF

Price Call: BUY

Target Price: 9.88

Genting Plant Q2 profit seen flat

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: MAYBANK

Price Call: HOLD

Target Price: 9.10

Genting Plantation Bhd's (GENP) net profit for the second quarter ended June 30, 2012 is expected to be flat quarter-on-quarter at RM80 million-RM90 million, says Maybank Investment Bank (Maybank IB).

In a research note today, the bank said the expected flattish results followed disappointing fresh fruit bunches (FFB) output and stable spot of crude palm oil average selling price.

"As a result, the first-half results would amount to just about 35 per cent of our previous financial year 2012 (FY12) net profit forecast.

"Ahead of its results release, we cut our FY12 net profit estimate by 12 per cent to reflect no growth in FFB production for 2012," it said.

Maybank IB said production has entered a seasonally stronger period and the bank expected earnings to play significant catch-up in second half of 2012.

"GENP has said unlike in the past four years whereby the first- and second-half production ratio averaged 45:55 per cent, the ratio in 2012 will be unique at around 40-42 per cent:58-60 per cent," it said.

The bank said the contributions from the property sector would be small but growing as the company continued to enjoy robust sales for its Johor properties in second quarter of this year with positive spillover effect from its Johor Premium Outlet.

Maybank IB has maintained its 'hold' call on the company with an unchanged target price of RM9.10. -- Bernama

RHB lifts Genting Plant target price

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: RHB

Price Call: HOLD

Target Price: 9.40

RHB Research raised its target price for Malaysian palm oil firm Genting Plantations to RM9.40 (US$2.97) from RM9.00 based on expected increases in property sales by 10 percent on year and improved production from its estates.

RHB said in a note to clients the impact of the drought on oil palm estates should end by mid-year, signalling a positive outlook for the second half of 2012.

Indonesian palm oil operations have also bolstered Genting Plantations' favourable stock price as its 12,000 hectare estate in Kalimantan province matures in 2013 and the possibility of setting up a new local refinery.

RHB kept its call on Genting Plantions at "market perform." -- Reuters

GENP (FV: RM10.13 - BUY) Corporate News Flash: Enlarges Indonesian Footprint

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: OSK

Price Call: BUY

Target Price: 10.13

THE BUZZ

Genting Plant has entered into an agreement to acquire astake in a joint  venture (JV) withGlobal Agrindo Investment Company Ltd to cultivate 74,390ha of oil palmplantation land in Central Kalimantan. The company will fork out USD116.0m (RM356.5m) for  a 63.2% stake in the JV, and will ultimatelyhold 60.0%  of the Indonesian assetsafter taking into account  the  minority stakes in several subsidiaries. Ofthe total landbank, 14,150ha of nucleus area and 4,195ha of plasma area havebeen planted.

OUR TAKE

The JV will increase Genting Plant's  total landbank in Malaysia and Indonesia from165.6k ha to 240.0k ha while boosting the planted area in Indonesia to about48.1k ha. As there is no visibility on the age profile of the 14,150ha planted,we are not factoring this into our earnings forecasts as yet. The acquisitionof the stake in the JV is expected to be completed by the end of 2Q this year.

Genting Plant had RM589.8m in net cash  as at end-CY11. After paying RM356.5m for its  JV stake, it will still  beholding  net cash,  and  assuch  the deal will not stretch its balance sheet.

In terms of purchase price, Genting Plant's 60% stake for USD116.0m implies  an enterprise value of USD193.3m. The14,150ha of planted area alone is  worth USD169.8m,assuming  that  these plantations have  young treesand  the pricing is USD12k per planted ha. Thus, we deem the purchase priceinexpensive.

Maintain Buy on Genting Plant, with its FV at RM10.13.

Source: OSK188

Genting Plantations - Enters into JV to develop 74,000ha of land BUY

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: AMMB

Price Call: BUY

Target Price: 10.65

- Genting Plantations Bhd (GenP) has entered into a jointventure with Global Agrindo Investment Company Ltd and Global AgripalmInvestment Holdings Pte Ltd to develop and cultivate about 74,000ha of oil palmplantations in Central Kalimantan, Indonesia. The landbank of 74,000ha alreadyhas the 'Hak Izin Lokasi' permit.

- GenP will hold an effective stake of 60% in the jointventure. GenP would be paying about US$116mil (RM355mil) for its 60%shareholding in the joint venture. 

- We view this development positively as the proposed jointventure would increase GenP's landbank in Indonesia and help sustain thegroup's long-term profitability.  

- Based on the effective stake of 60% in the joint venture,GenP's cost of acquisition of the landbank in Indonesia would come up to aboutUS$2,613/ha or RM7,995/ha. 

- This is higher than TH Plantation's cost of acquisition ofRM1,186/ha for its 14,180ha of land in East Kalimantan and CB IndustrialProduct Holding's (CBIP) cost of RM703/ha for its 22,754ha of land in CentralKalimantan. It has to be noted that CBIP's landbank did not have the 'Hak IzinLokasi' permit at the time of the announcement.   

- We believe that GenP is paying a premium for its landbankin Central Kalimantan due to its large size. Also, about 14,150ha of the land(Inti) has already been planted with oil palm. The proposed acquisition wouldincrease GenP's landbank in Indonesia from 100,254ha to 174,254ha. IncludingMalaysia, GenP's landbank would amount to 239,950ha in total.   

- Financing the equity cost of the joint venture is notexpected to be a problem for GenP as it has net cash of RM589.8mil as atend-December 2011.

- As at end-FY11, GenP has planted areas of 33,922ha inIndonesia. The group plans to plant oil palm on 7,000ha to 8,000ha in FY12F. InFY12F, GenP's FFB production is forecast to rise 8% to 9%, out of whichIndonesia is expected to account for about 6 percentage points. 

- We maintain a BUY on GenP due to its long-term growthpotential underpinned by its operations in Indonesia. GenP is also one of thelowest producers of palm oil with an operating cost of RM1,000/tonne toRM1,100/tonne.    

Source: AmeSecurities

GENP - Buy for long term growth

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: HWANGDBS

Price Call: BUY

Target Price: 11.00

Genting Plantations; Buy; RM9.60
Price Target: RM11.00; GENP MK

Acquisition of 74k ha to underpin long term earnings visibility. 60% of unplanted areas to drive expansion. Maintain Buy with RM11.00 TP.

Source: HwangDBS Research - 16 April 2012

Genting Plantations: Maintain Hold - Expansion at a hefty premium

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: MAYBANK

Price Call: HOLD

Target Price: 9.10

Neutral near term impact. GENP's exercise to secure ~74,000 ha of land comes with a hefty premium amidst growing scarcity of strategic land in Indonesia. The exercise will expand its immediate planted land bank by 14,150 ha (+15%), and double its plantable reserves in Indonesia to ~100,000 ha. Earnings impact is neutral in 2012-13. We however raise our 2012-14 net profit forecasts for GENP by 13-19.5% p.a. post revision to our CPO ASP forecast. Still, GENP remains a Hold with our revised TP of RM9.10 (+12%) on unchanged 14.5x 2013 PER.

Click here for full report

Source: Maybank Research - 16 April 2012

Genting Plantations - Planting growth in Indonesia

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: CIMB

Price Call: HOLD

Target Price: 9.35

Target RM9.35

Genting Plantations' US$116m acquisition of 63.2% of a JV company with Indonesian estates is a good move as it will boost its output growth, raised its planted area by 15% and enhance FY13-14 EPS by 1-3%. Our SOP-based target price rises as we up the plantation P/E from 12.6x to 14x, in line with the big-cap players. We upgrade the stock from Underperform to Neutral as the stronger growth prospects help offset our concern over its rich valuations. We continue to prefer Sime Darby.

Source: CIMB Daybreak - 16 April 2012, Full PDF Report

Genting Plantations ' Expanding further into Indonesia

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: RHB

Price Call: BUY

Target Price: 10.45

Genting Plantations ' Expanding further into Indonesia                                                          Outperform

News Update

-          Genting Plantations' subsidiary has entered into an S&P Agreement with Global Agrindo and Global Agripalm to establish a JV for the development of approximately 74,390 ha of oil palm plantation in Kalimantan Tengah, Indonesia for US$116m (RM356.3m). Upon completion of acquisition and subscription, GP's stake in the JV Co will be 63.2%. 14,150ha of land has already been planted, while another 4,195ha has been planted under the plasma scheme.

-          We maintain our fair value of RM10.45, based on an unchanged 17x CY12 target PER. Maintain Outperform.

Source: RHB Research - 16 April 2012

Genting Plantations (HOLD) - Expands landbank further

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: HLG

Price Call: HOLD

Target Price: 9.86

Genting Plantations (HOLD)

Expands landbank further

• Entered into a joint venture agreement to develop andcultivate 74,390ha of oil palm plantations in Central Kalimantan, Indonesia.
• GENP would pay US$116m (or RM355m) for its effective60% stake in the joint venture, which in turn indicates that GENP is payingUS$2,599/ha (or RM7,953/ha) for the landbank).
• The latest transaction will boost Genting Plant's total landbank by44.9% (or 74,390 ha) to 239,950 ha.  
• In terms of impact to GENP's balance sheet, the latest transaction willreduce GENP's net cash from RM589.8m (as at 31 Dec 2011) to RM234.8m.
• Earnings forecasts, TP of RM9.86 (based on 15x 2013EPS) and Hold recommendation maintained.

Source: HLIB Research - 16 April 2012 

Genting Plantation - OUTPERFORM - Expanding landbank aggressively by 45%

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: KENANGA

Price Call: BUY

Target Price: 10.70

News 

- Entered into a joint venturewith Global Agrindo Investment (GAI) to develop 74,390 ha of plantation land inCentral Kalimantan, Indonesia.

- Genting Plantation (GENP) willpay US$66m to GAI. Another US$50m will be injected into the JV via subscriptionof new shares.

- GENP will have an effectivestake of 60% in the Indonesian subsidiary. (Refer Page 2).

- Out of the total 74,390 ha ofland, 18,345ha (or 25%) of it has been planted. 4,195 (or 23%) of the plantedarea are under plasma scheme.

Comments 

- Positive on the deal. Totalplantation landbank will increase significantly by 45% to 239,950ha. GENP'stotal landbank will then overtake IOI's total landbank of 179,974ha to become Malaysia'sthird largest plantation company by landbank size behind SIME (873,222 ha) andKLK (250,729 ha).

- Planted area will also jump 20%to 111,929 ha.

- The deal's effective landpricing of c.RM7,800/ha (Refer Page 2) seems fair as 25% of the land has beenplanted. We gather that the latest greenfield plantation land deals in East Kalimantanwere transacted at the range of RM541/ha - RM1276/ha.

Outlook 

- Long term growth is secured as53% of its total landbank is now still unplanted (previously 43%).

Forecast

 - Step up FY14E-FY16E earnings by 5%-8% as a resultof 6%-10% increase in FFB production. 

- FY12E-FY13E earnings are leftunchanged as we expect the land to only start bearing fruits from FY14Eonwards. Although  25% of the total area hasbeen planted, we think the oil palm trees there is still immature as PTGAL (thesubsidiary who owns the land) is still reporting net loss of RM1.6m for FY10.Oil palm tree usually starts to produce FFB at 3.5 years old.

Rating  UPGRADE TO OUTPERFORM

- With the big jump in  its total landbank, we expect the stockvaluation to rerate closer to the current big cap planters Fwd PER of 17.0x.

Valuation  

- Raising our TP to RM10.70(previously RM9.90), based on higher PER of 16.4x (previously 15.2x) on ourunchanged FY12E EPS of 65.3 sen.

- We have applied 1 StandardDeviation above its average Fwd PER to arrive at a 16.4x Fwd PER (previously15.2x @ +0.5SD), which is higher than its peers' +0.5SD, given more sizeable landbankwith higher long term FFB growth potential.  

Source: Kenanga

Plantation - OVERWEIGHT - Tree stress effect may have just starte

Stock Name: SIME
Company Name: SIME DARBY BHD

Research House: KENANGA

Price Call: BUY

Target Price: 11.60

Stock Name: IJMPLNT
Company Name: IJM PLANTATIONS BHD

Research House: KENANGA

Price Call: BUY

Target Price: 4.25

Stock Name: TAANN
Company Name: TA ANN HOLDINGS BHD

Research House: KENANGA

Price Call: BUY

Target Price: 7.75

Stock Name: UMCCA
Company Name: UNITED MALACCA BHD

Research House: KENANGA

Price Call: BUY

Target Price: 8.00

Stock Name: KLK
Company Name: KUALA LUMPUR KEPONG BHD

Research House: KENANGA

Price Call: HOLD

Target Price: 23.60

Stock Name: IOICORP
Company Name: IOI CORPORATION BHD

Research House: KENANGA

Price Call: HOLD

Target Price: 5.60

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: KENANGA

Price Call: HOLD

Target Price: 9.90

Malaysia's CPO inventory level for Mar-12 was reported at1.96m mt or 2% lower than the consensus estimate of 2.00m mt. It was also 6%below our estimate of 2.08m mt. The key surprise was the better-than-expectedexports growth of 11% MoM to 1.34m mt (5% above the consensus and ourexpectation of 1.28m mt). Judging from the CPO production severe YoY decline of14% to 1.21m mt in Mar-12, we believe that oil palm trees may have just enteredtheir tree stress period. Typically, CPO production will be flat or declineduring its tree stress period. Among the key CPO consumers, the highest exportgrowth was noticed in Pakistan (+125% MoM to 78k mt), Europe (+63% MoM to 174kmt) and India (+11% MoM to 120k mt). The latest USDA WASDE report was bullishto CPO prices as it reaffirmed the global soybean oil shortage for the 2011/12season. The global soybean oil inventory was cut by 0.17m mt or 6.2% from itsprevious forecast to only 2.56m mt. All the bullish fundamental  factors mentioned continue to support ourOVERWEIGHT call on the plantation sector. We maintain our CY12 average CPO priceof RM3,200 per mt but may increase it further if soybean oil production continuesto deteriorate in South America.  We  have OUTPERFORM  calls  on SIME (TP: RM11.60) and IJM Plantation (TP: RM4.25) on valuation grounds.To leverage on  their  double digit  FFB  growth, we  also  have OUTPERFORM  calls  on Ta  Ann (RM7.75) and UnitedMalacca (TP: RM8.00). Meanwhile, we maintain MARKET PERFORM calls on KLK (TP:RM23.60), IOI (TP: RM5.60) and GENP (TP: RM9.90).

Mar-12 stocks levelbelow expectation.  The  CPO inventory level of 1.96m mt was 2% lowerthan the consensus estimate of 2.00m mt. It is also 6% below our estimate of 2.08m mt. The key surprise was thebetter-than-expected exports growth of 11% MoM to 1.34m mt (5% above theconsensus and our expectation of 1.28m mt). As the exports growth of 11% MoMsurpassed the production increase of 2% MoM, the stocks-to-usage ratio declined to 11.3% in Mar-12 (from 13.5%in Feb-12). On the overall, the meaningful drop in the stocks level to below2.00 mt is positive for CPO prices.

Tree stress effecthas just started. CPO production slumped 14% YoY to 1.21m mt in Mar-12.  The decline  was  more severe  than  market expectations  of  a 7%  to  9% drop  and  our expectation of a 2% drop. As highlightedearlier  in our sector update report on27 Mar, we believe that the tree stress effect on oil palm trees has started.Hence, the CPO production upcycle, which has lasted for 12 months (from Mar-11to Feb-12) should have ended. In Apr-12, CPO production is likely to register aYoY production decline of about 4% to about 1.47m mt. However, our estimate mayappear too optimistic at the current juncture as the severity of tree stresseffect is still unclear. CPO prices are nonetheless likely to appreciatefurther as CPO production will be limited as tree stress effects usually lastfor 2 years.

Strong CPO exports inMar-12 likely to continue. Exports surged by 11% MoM or 132k mt in Mar-12to 1.34m mt. Among the key CPO consumers, the highest growth was seen in Pakistan(+125% MoM to 78k mt), Europe (+63% MoM to 174k mt) and India (+11% MoM to 120kmt). The strengthening CPO exports to Pakistan were probably caused by a normalisationprocess as the Feb-12 number was extremely low (due to transporters' strike in thecountry causing closure of the factories). The strong CPO export trend islikely to continue in  April,  judging from  the  cargo surveyor's  estimate  of an  8%  CPO export  growth  to 479k  mt in the first 10 days ofApril. The resilient CPO demand should support CPO prices in 2Q12.

USDA WASDE reportbullish for CPO prices.  In thelatest World Agriculture Supply and Demand Estimates report released on 10 Apr,USDA has reduced its 2011/12 season global soybean oil inventory by 0.17m mt or6.2% from its previous forecast to only 2.56m mt. As a result, the 2011/12season global soybean oil stock-to-usage ratio declined by 41pp to 6.08% fromlast month's estimate of 6.49%. Soybean oil production from South America has meanwhilebeen severely affected by bad weathers. Argentina soybean oil productionforecast has been reduced by 0.13m mt or 1.7% to 7.30m mt while Brazil soybeanoil production has been  cut  by 0.11m  mt  or 1.6%  to  6.81m mt.  CPO  prices will  benefit  from this  as  it is  usually used as a substitutefor soybean oil.  


Source: Kenanga

Genting Plantations (GENP MK, BUY, FV RM10.13, Last Close: RM9.53)

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: OSK

Price Call: BUY

Target Price: 10.13

We are maintaining our Buy call on Genting Plant with  our  FVunchanged at RM10.13. Genting Plant is a core Malaysian plantation holding andone of the biggest, best managed and most  highly focused. While  its  PEvaluation looks stretched, this is due to the stock pricing in the value of itslandbank in Iskandar Region, which we estimate to be  worth between RM1.71  and RM2.13 per share. Knocking off the Iskandar land, Genting Plant  is trading at 14.7x CY12 and 13.6x CY13 earnings.

Highly leveraged toCPO price. Being an upstream plantation player in Malaysia and by virtue ofthe group  being a spot seller, GentingPlant's profitability is highly leveraged to crude palm oil price. We estimatethat for  every  RM100 increase in CPO price, Genting Plant'snet profit will increase by RM17.1m.

Slow and steady.Genting Plant has been steadily growing its oil palm hectarage in the last 20years. Since 1991, it has increased its planted area every single year withoutfail, bringing it from 20,401 ha to 93,503 ha within a span of 20 years. Thisgives the company a long term hectarage CAGR of 7.9%.

Growth focused onKalimantan. Since 2007, and armed with a net cash balance sheet, GentingPlant started its expansion in Kalimantan as land in Malaysia became scarce andtoo expensive. As of end-2011, Genting Plant had 33,922 ha of oil palm plantedareas in Kalimantan.

Production growth.Its estates in Malaysia and Indonesia are both supportive of further productiongrowth although the bulk the growth will come from its Kalimantan estates. Assumingthat Malaysia plantation's production stays flattish going forward, GentingPlant's FFB production will increase to 2.086m tonnes by 2021 based on itsexisting planted area and conservative peak FFB yield of 24 tonnes per ha. Thisimplies a 5.1% CAGR over the next 10 years.

Owner of valuableland in Johor. To our knowledge, Genting Plant is the second largest landownerin Johor's Iskandar Region after UEM Land. Other than 96 ha of development landat its Indahpura property project, Genting Plant also owns some 2,600 ha of oilpalm plantations adjacent to its Indahpura project.

Source: OSK188

Genting Plantation to see revenue boost

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: JF APEX

Price Call: SELL

Target Price: 8.14

KUALA LUMPUR: Genting Plantation Bhd is expected to see a strong growth in revenue for the financial years ending 2013 and 2014,
with contribution from planted areas in Indonesia, says JF Apex Securities.

The research house said Genting Plantation is having some 29,413 ha of planted area in that country, which is an increase of 66 per cent compared to 2009.

It also believed that Genting Plantation could sustain its high profit before tax (PBT) margin in the coming years mainly attributable to effective cost management.

In another development, Johor Premium Outlet (JPO), the joint venture between Genting Plantation and Premium Outlets, was launched in December 2011.

"We expect earnings contribution from JPO to be between one per cent and two per cent per annum in 2012 financial year's net profit and we understand that the second JPO is in the pipeline to be established in the near future.

"We expect total earnings contribution from JPO at between five per cent and eight per cent per annum by then," it said.

The research house has a "Sell" recommendation for the stock with a target price of RM8.14. - Bernama

Genting Plantations: Upgrade to Hold - Within expectations

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: MAYBANK

Price Call: HOLD

Target Price: 8.10

Raising forecasts and call. GENP's 2011 net profit of RM442m (+36% YoY) accounted for 102% and 99% of our and consensus forecasts respectively. We raise our 2012-13 net profit forecasts by 17-20% on higher CPO ASPs and FFB output assumptions. At our raised TP of RM8.10 (+21%) based on unchanged 14.5x 2013 PER, the potential downside is now 12%; we therefore upgrade the stock to a Hold (from Sell).

Maybank Research 28 Feb 2012

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GENP - 4Q11 in line

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: HWANGDBS

Price Call: BUY

Target Price: 11.00

Genting Plantations; Buy; RM9.25
Price Target: RM11.00; GENP MK

4Q11 earnings within expectations; declared total DPS of 9sen/share. Earnings declined q-o-q on lower CPO prices and higher operating cost. Maintain Buy with RM11.00 TP.

Source: HwangDBS Research 28 Feb 2012

Genting Plantations - Bumper harvest in 2011

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: CIMB

Price Call: SELL

Target Price: 8.53

Target RM8.53

The record profit in 2011 may not be sustainable given rising labour and fertiliser costs. We also see earnings risks for its Malaysian estates from potential government measures to help refiners.

Source: CIMB Daybreak February 28, 2012, PDF Report

Genting Plantations - Indonesia contribution coming in nicely

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: AMMB

Price Call: BUY

Target Price: 10.65

We are keeping our BUY recommendation on Genting PlantationsBhd (GenP) with a higher fair value of RM10.65/share (vs. RM9.25/sharepreviously) based on an FY12F PE of 18x. Our previous PE assumption was15x. 

GenP's historical PE band ranged from a low of 5x to a highof 28x in the past seven years. The group's average PE was 16x. 

GenP's 4QFY11 results were within consensus estimates andour forecast. We have tweaked GenP's FY12F earnings forecast downwards by 3%due to housekeeping reasons.

GenP has declared a special gross DPS of 6.25 sen less 25%tax and a final gross DPS of 5.75 sen less 25% tax for FY11. These bring totalgross DPS to 16.25 sen for FY11 (FY10: 12.5 sen), which translates into a yieldof 1.8%. 

GenP's strong net profit growth of 36.6% in FY11 was underpinnedby a 15% increase in FFB production and 18% expansion in the average CPO price.Average CPO price realised was RM3,240/tonne in FY11 compared with RM2,738/tonnerecorded in FY10.

From the conference call yesterday, we understand that GenPis currently selling its CPO production at spot prices. The group has not facedany problems selling its CPO production to refineries in Malaysia.

GenP's operating cost was RM1,064/tonne in FY11, marginallyhigher than the RM1,053/tonne recorded in FY10. Operating cost could increasein FY12F due to higher fertiliser costs. We understand that cost of fertiliser sourcedfor 1HFY12 have risen by 21% compared to FY11.GenP's FFB production is expectedto expand by 8% to 9% in FY12F. The plantation division in Indonesia isenvisaged to account for 6 percentage points of the 8% to 9% FFB output growthwhile Malaysia is anticipated to account for the balance 2 to 3 percentagepoints. 

GenP's FFB production in Indonesia is expected to rise fromabout 24,000 tonnes in FY11 to 100,000 tonnes in FY12F.

So far, GenP has not experienced any tree stress. The groupexpects the FFB yield of its oil palm trees in Peninsular Malaysia to remainflat in FY12F while that of the trees in Sabah might improve by 5%.  

GenP declined to reveal the profitability of Johor Premium Outlet(JPO). However, we understand that the numbers were within management'sexpectation. JPO was officially opened on 2 December 2011.

Source: AmeSecurities 

GENP - Solid cash cow

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: HWANGDBS

Price Call: BUY

Target Price: 11.00

Genting Plantations; Buy; RM9.51
Price Target: RM11.00; GENP MK

FY12F-13F profit raised by 11% ' 16% on revised CPO prices, FX rates, Success of Iskandar Malaysia should boost value of its 5,500 acre land bank in Kulai. Reiterate Buy, SOP-derived TP raised to RM11.00 (16% upside potential)

Source: HwangDBS Research 14 Feb 2012