Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
Company Name: TH PLANTATIONS BHD
| Research House: MIDF | Price Call: BUY | Target Price: 2.00 |
Showing posts with label THPLANT. Show all posts
Showing posts with label THPLANT. Show all posts
November 20, 2014
May 22, 2014
THP - Harvesting the fruits from aggressive acquisitions
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
Company Name: TH PLANTATIONS BHD
| Research House: MIDF | Price Call: BUY | Target Price: 2.76 |
November 19, 2013
THPLANT - Strongest production growth among peers
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
Company Name: TH PLANTATIONS BHD
| Research House: MIDF | Price Call: BUY | Target Price: 2.10 |
August 21, 2013
TH Plantations - Growing pains
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
Company Name: TH PLANTATIONS BHD
| Research House: MIDF | Price Call: BUY | Target Price: 2.10 |
June 24, 2013
Improved mechanisations to reduce labour dependency
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
Company Name: TH PLANTATIONS BHD
| Research House: MIDF | Price Call: BUY | Target Price: 2.10 |
June 3, 2013
Earnings impacted by higher amortization cost
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
Company Name: TH PLANTATIONS BHD
| Research House: MIDF | Price Call: BUY | Target Price: 2.60 |
March 5, 2013
FY13 outlook brightens with recent acquisitions
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
Company Name: TH PLANTATIONS BHD
| Research House: MIDF | Price Call: BUY | Target Price: 2.64 |
October 31, 2012
Slow margin recovery
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
Company Name: TH PLANTATIONS BHD
| Research House: BIMB | Price Call: BUY | Target Price: 3.17 |
Lacklustre refineries’ demand hit bottom-line
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
Company Name: TH PLANTATIONS BHD
| Research House: MIDF | Price Call: HOLD | Target Price: 2.40 |
August 6, 2012
Lower on-year earnings amidst weak production year
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
Company Name: TH PLANTATIONS BHD
| Research House: MIDF | Price Call: HOLD | Target Price: 2.40 |
July 25, 2012
TH Plantations - Big acquisition in the pipeline
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
Company Name: TH PLANTATIONS BHD
| Research House: BIMB | Price Call: BUY | Target Price: 2.80 |
April 25, 2012
TH Plantations cut to 'trading sell'
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
MIDF Research lowered its call on Malaysia's plantation firm TH Plantations Bhd to "trading sell" from "neutral" on the back of lower earnings due to higher labour and fertilizer costs.
In a research note on Wednesday, MIDF said higher costs and lower crude palm oil (CPO) prices dragged down TH Plantations' earnings in the first quarter this year by 40 percent on year, and as much as 65 percent on quarter to RM13.07 million (US$4.26 million).
MIDF cut its FY12 and FY13 earnings forecast for the planter by 41 percent and 33 percent respectively on lower profit margin assumptions.
"We do not expect TH Plant's earnings to recover swiftly in subsequent quarters in FY12 as crude palm oil price is downtrending and production is expected to stay flat," the broker said.
MIDF also revised its target price for the company to RM2.12 from RM3.00.
As of 10.05am Malaysian time, TH Plantations' shares fell 1.07 percent. -- Reuters
Company Name: TH PLANTATIONS BHD
| Research House: MIDF | Price Call: BUY | Target Price: 3.00 |
MIDF Research lowered its call on Malaysia's plantation firm TH Plantations Bhd to "trading sell" from "neutral" on the back of lower earnings due to higher labour and fertilizer costs.
In a research note on Wednesday, MIDF said higher costs and lower crude palm oil (CPO) prices dragged down TH Plantations' earnings in the first quarter this year by 40 percent on year, and as much as 65 percent on quarter to RM13.07 million (US$4.26 million).
MIDF cut its FY12 and FY13 earnings forecast for the planter by 41 percent and 33 percent respectively on lower profit margin assumptions.
"We do not expect TH Plant's earnings to recover swiftly in subsequent quarters in FY12 as crude palm oil price is downtrending and production is expected to stay flat," the broker said.
MIDF also revised its target price for the company to RM2.12 from RM3.00.
As of 10.05am Malaysian time, TH Plantations' shares fell 1.07 percent. -- Reuters
April 3, 2012
TH Plantations - LTH to sell oil palm estates in Indonesia? BUY
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
Company Name: TH PLANTATIONS BHD
| Research House: AMMB | Price Call: BUY | Target Price: 3.25 |
- According to news reports, Lembaga Tabung Haji (LTH) hasconditionally accepted a proposal by an Indonesia-based company to buy its 95%stake in PT TH Indo Plantations (THIP). LTH said that it first received aproposal to acquire its stake in THIP in February 2012.
- The disposal price of the oil palm estates in Indonesiawas not disclosed. We estimate that the disposal proceeds would be aboutRM2.1bil based on a conservative assumption of RM30,000/ha and the disposedstake of 95%.
- We are puzzled at the rationale for the disposal of LTH'soil palm estates in Indonesia. Although TH Plantations' balance sheet is smallcurrently, it has always been a subject of discussion that LTH's Indonesianplantation assets would be injected into TH Plantations one day.
- Currently, TH Plantations manages LTH's oil palm estatesin Indonesia. The management fee was about RM25.8mil in FY11, which accountedfor 6% of group turnover.
- It was not disclosed if the TH Plantations would continueto manage the oil palm estates in Indonesia under the new owner. However, wereckon that it would be in the best interest if the new owner if TH Plantationswere to continue. This is due to the large size of the estates, which wouldmake it difficult for the new owner to look for new estate managers and workers.
- Also, we believe that without the management fee, THPlantations' net profit would fall significantly.
- Presently, LTH's plantation landbank in Riau, Indonesiaamount to about 83,878ha. Planted area is roughly 73,514ha. Out of the plantedarea of 73,514ha, approximately 63% of the oil palm trees are between 10 to 19years old while another 28% is between four to nine years old. The balance 8%of the oil palm trees are three years and below.
- We would be seeking more information from TH Plantation'smanagement on the details of the proposed disposal of LTH's oil palm estates inIndonesia. Maintain a BUY on TH Plantations for now.
Source: AmeSecurities
February 22, 2012
TH Plantations: Maintain Hold - Boosted by near-zero taxes in 4Q11
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
Earnings before tax in line. THP reported a 40% increase in 2011 net profit, to RM125m. 4Q11 net profit was boosted by near-zero taxes, bringing effective tax rates to 18% in 2011 (2010: 25%). Otherwise, 2011 PBT of RM183m (+27% YoY) was within our and consensus expectations. We raise 2012-13 forecasts by 23-24% on higher CPO ASP assumption. Our new TP is RM2.42 (+19%) based on unchanged 11x PER. Maintain Hold given its unexciting 6.6% 2011-14 FFB CAGR.
Maybank Research 22 Feb 2012
Click here for full report
Company Name: TH PLANTATIONS BHD
| Research House: MAYBANK | Price Call: HOLD | Target Price: 2.42 |
Earnings before tax in line. THP reported a 40% increase in 2011 net profit, to RM125m. 4Q11 net profit was boosted by near-zero taxes, bringing effective tax rates to 18% in 2011 (2010: 25%). Otherwise, 2011 PBT of RM183m (+27% YoY) was within our and consensus expectations. We raise 2012-13 forecasts by 23-24% on higher CPO ASP assumption. Our new TP is RM2.42 (+19%) based on unchanged 11x PER. Maintain Hold given its unexciting 6.6% 2011-14 FFB CAGR.
Maybank Research 22 Feb 2012
Click here for full report
November 17, 2011
MIDF Research maintains Buy on TH Plantations, TP RM2.51
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
KUALA LUMPUR (Nov 17): MIDF Research is maintaining its Buy call on TH PLANTATION []s Bhd at a higher revised price of RM2.51 from RM2.26.
It said on Thursday in line with the upwards earnings revision, it was revising our target price by 11% to RM2.51.
'The target price is derived from 9.5 times EPS12, which is 0.5-standard deviation below its three-year historical PER of 10.3 times,' it said.
'The higher targeted PER (we previously discount the valuation by one standard deviation) is to reflect TH Plant's maturity and stable business operation,' it added.
Company Name: TH PLANTATIONS BHD
| Research House: MIDF | Price Call: BUY | Target Price: 2.51 |
KUALA LUMPUR (Nov 17): MIDF Research is maintaining its Buy call on TH PLANTATION []s Bhd at a higher revised price of RM2.51 from RM2.26.
It said on Thursday in line with the upwards earnings revision, it was revising our target price by 11% to RM2.51.
'The target price is derived from 9.5 times EPS12, which is 0.5-standard deviation below its three-year historical PER of 10.3 times,' it said.
'The higher targeted PER (we previously discount the valuation by one standard deviation) is to reflect TH Plant's maturity and stable business operation,' it added.
November 14, 2011
TH Plantations acquires two companies with 20,000ha of land
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
TH Plantations Bhd
(Nov 14, RM2.13)
Maintain outperform with fair value of RM2.55: THP has entered into two separate conditional sales and purchase agreements with: (i) Sawit Green Plantation Sdn Bhd to acquire a 70% stake in Hydroflow Sdn Bhd for RM73.5 million. Hydroflow owns eight parcels of land with provisional leases in the Sedilu-Gedong district of Sarawak, with total land area of 5,602ha. Some 693ha (12.4%) of the land is planted, with 85% of planted land more than four years old. This acquisition is to be completed by 1Q12; and (ii) Indonesian citizens H Rajasa Abdurachman and Badai Sakti Daniel to acquire a 93% stake in PT Persada Kencana Prima (PKP), for 46,211.96 million rupiah (RM16.18 million). PKP has obtained a plantation business permit (Izin Usaha Perkebunan) to operate 14,180ha of plantation land in Seseyap Hilir, Tana Tidung District, East Kalimantan. This acquisition is to be completed by 2Q12.
THP will need to spend an additional RM495 million (RM102 million for Hydroflow and RM393 million for PKP) over five to six years to develop all the land, which will be funded by internal funds and borrowings.
The acquisition price of the Hydroflow land works out to about RM18,740 per ha for its effective 70% stake, which we believe is relatively inexpensive for semi-planted land in Sarawak, given that planted land in Sarawak is usually about RM30,000 to RM50,000 per ha, while unplanted land is about RM10,000 RM15,000 per ha.
PKP's acquisition price of RM1,275 per ha is also on the low end of greenfield land transactions in Kalimantan, of between US$500 (RM1,565) and US$1,000 per ha. Upon completion of the acquisitions, THP's total plantation landbank will rise by 50% to 59,153ha (from 39,371ha currently), thereby meeting its key performance indicator to reach a landbank of 50,000ha by 2012.
We are positive on this development, as we believe the pricing is reasonable. We are pleased to note that as the land in Sarawak is not native customary rights (NCR) land, THP should not face the issues other planters who have tried to expand their landbank in Sarawak have.
Forecasts are unchanged pending more details at THP's briefing tomorrow. Risks include: (i) a reversal in crude oil price trends; (ii) weather abnormalities; (iii) change in emphasis on implementing global biofuel mandates and trans-fat policies; and (iv) a faster or slower than expected global economic recovery.
We make no change to our fair value of RM2.55, based on CY12 price-earnings ratio target of nine times. This does not include its attractive dividend yield of 7% to 7.5% per year. We maintain our 'outperform' recommendation. ' RHB Research, Nov 14
This article appeared in The Edge Financial Daily, November 15, 2011.
Company Name: TH PLANTATIONS BHD
| Research House: RHB | Price Call: BUY | Target Price: 2.55 |
TH Plantations Bhd
(Nov 14, RM2.13)
Maintain outperform with fair value of RM2.55: THP has entered into two separate conditional sales and purchase agreements with: (i) Sawit Green Plantation Sdn Bhd to acquire a 70% stake in Hydroflow Sdn Bhd for RM73.5 million. Hydroflow owns eight parcels of land with provisional leases in the Sedilu-Gedong district of Sarawak, with total land area of 5,602ha. Some 693ha (12.4%) of the land is planted, with 85% of planted land more than four years old. This acquisition is to be completed by 1Q12; and (ii) Indonesian citizens H Rajasa Abdurachman and Badai Sakti Daniel to acquire a 93% stake in PT Persada Kencana Prima (PKP), for 46,211.96 million rupiah (RM16.18 million). PKP has obtained a plantation business permit (Izin Usaha Perkebunan) to operate 14,180ha of plantation land in Seseyap Hilir, Tana Tidung District, East Kalimantan. This acquisition is to be completed by 2Q12.
THP will need to spend an additional RM495 million (RM102 million for Hydroflow and RM393 million for PKP) over five to six years to develop all the land, which will be funded by internal funds and borrowings.
The acquisition price of the Hydroflow land works out to about RM18,740 per ha for its effective 70% stake, which we believe is relatively inexpensive for semi-planted land in Sarawak, given that planted land in Sarawak is usually about RM30,000 to RM50,000 per ha, while unplanted land is about RM10,000 RM15,000 per ha.
PKP's acquisition price of RM1,275 per ha is also on the low end of greenfield land transactions in Kalimantan, of between US$500 (RM1,565) and US$1,000 per ha. Upon completion of the acquisitions, THP's total plantation landbank will rise by 50% to 59,153ha (from 39,371ha currently), thereby meeting its key performance indicator to reach a landbank of 50,000ha by 2012.
We are positive on this development, as we believe the pricing is reasonable. We are pleased to note that as the land in Sarawak is not native customary rights (NCR) land, THP should not face the issues other planters who have tried to expand their landbank in Sarawak have.
Forecasts are unchanged pending more details at THP's briefing tomorrow. Risks include: (i) a reversal in crude oil price trends; (ii) weather abnormalities; (iii) change in emphasis on implementing global biofuel mandates and trans-fat policies; and (iv) a faster or slower than expected global economic recovery.
We make no change to our fair value of RM2.55, based on CY12 price-earnings ratio target of nine times. This does not include its attractive dividend yield of 7% to 7.5% per year. We maintain our 'outperform' recommendation. ' RHB Research, Nov 14
This article appeared in The Edge Financial Daily, November 15, 2011.
November 9, 2011
Rain dampens plantation output
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
Plantation
Maintain neutral: The Malaysian Palm Oil Board (MPOB) is due to release its October statistics today. We are expecting crude palm oil (CPO) output in October to be slightly lower than September's 1.87 million tonnes.
We estimate that CPO output in October fell by 4.1% month-on-month (m-o-m) to 1.79 million tonnes, mainly due to wet weather conditions in northern Peninsular Malaysia and Sabah and Sarawak.
However, cumulative CPO output is expected to be 9.6% year-on-year (y-o-y) higher to 15.7 million tonnes and full-year output may touch 18 million tonnes for the first time.
Total exports in October are likely to have increased as lower CPO prices spurred buying interest. We estimate 1.69 million tonnes of total exports in October, an increase of 9.5% m-o-m and 15.7% y-o-y.
Independent cargo surveyor Societe Generale de Surveillance (SGS) estimates that total exports in October increased by 11.9% m-o-m to 1.68 million tonnes, mainly due to higher exports to EU countries and Pakistan. SGS estimates that on a sequential month basis, total exports in October to EU countries increased 27% to 317,000 tonnes while exports'' to Pakistan almost tripled to 201,750 tonnes.
Despite the higher expected export figure for October, we are maintaining our 'neutral' recommendation on the sector given that: (i) Export growth is not keeping pace with CPO production growth. This will cause the inventory level to remain at its current high level of two million tonnes; and (ii) Narrowing discount of CPO price to soyabean price. Currently, CPO is trading at a 14.5% discount to the soyabean price, which is 0.8 of a percentage point lower than its five-year average discount of 15.3%. The narrowing of the discount implies the CPO price is probably running ahead of its fundamentals. We do not discount the possibility it will retrace in the weeks ahead.
We are keeping our average CPO price forecast of RM3,200 per tonne for 2011 and RM2,700 per tonne for 2012 and maintaining our 'buy' calls for Sime Darby Bhd (target price: RM9.05), TSH Resources Bhd (TP: RM3.54) and TH Plantations Bhd (TP RM2.26). ' MIDF Research, Nov 9
This article appeared in The Edge Financial Daily, November 10, 2011.
Company Name: TH PLANTATIONS BHD
| Research House: MIDF | Price Call: BUY | Target Price: 2.26 |
Plantation
Maintain neutral: The Malaysian Palm Oil Board (MPOB) is due to release its October statistics today. We are expecting crude palm oil (CPO) output in October to be slightly lower than September's 1.87 million tonnes.
We estimate that CPO output in October fell by 4.1% month-on-month (m-o-m) to 1.79 million tonnes, mainly due to wet weather conditions in northern Peninsular Malaysia and Sabah and Sarawak.
However, cumulative CPO output is expected to be 9.6% year-on-year (y-o-y) higher to 15.7 million tonnes and full-year output may touch 18 million tonnes for the first time.
Total exports in October are likely to have increased as lower CPO prices spurred buying interest. We estimate 1.69 million tonnes of total exports in October, an increase of 9.5% m-o-m and 15.7% y-o-y.
Independent cargo surveyor Societe Generale de Surveillance (SGS) estimates that total exports in October increased by 11.9% m-o-m to 1.68 million tonnes, mainly due to higher exports to EU countries and Pakistan. SGS estimates that on a sequential month basis, total exports in October to EU countries increased 27% to 317,000 tonnes while exports'' to Pakistan almost tripled to 201,750 tonnes.
Despite the higher expected export figure for October, we are maintaining our 'neutral' recommendation on the sector given that: (i) Export growth is not keeping pace with CPO production growth. This will cause the inventory level to remain at its current high level of two million tonnes; and (ii) Narrowing discount of CPO price to soyabean price. Currently, CPO is trading at a 14.5% discount to the soyabean price, which is 0.8 of a percentage point lower than its five-year average discount of 15.3%. The narrowing of the discount implies the CPO price is probably running ahead of its fundamentals. We do not discount the possibility it will retrace in the weeks ahead.
We are keeping our average CPO price forecast of RM3,200 per tonne for 2011 and RM2,700 per tonne for 2012 and maintaining our 'buy' calls for Sime Darby Bhd (target price: RM9.05), TSH Resources Bhd (TP: RM3.54) and TH Plantations Bhd (TP RM2.26). ' MIDF Research, Nov 9
This article appeared in The Edge Financial Daily, November 10, 2011.
October 18, 2011
Delayed El Nino effect to support CPO prices
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
Plantation sector
Maintain neutral: In an analysis of palm oil production and the impact on prices for 2011/12, Ling Ah Hong, director of Ganling Sdn Bhd, said bad weather does not affect production immediately, and he is expecting delayed El Nino effects in 4Q11 and 1Q12.
The prolonged La Nina and El Nino can affect palm oil production for as long as 24 months after its occurrence.
Peninsular Malaysia experienced a prolonged drought from May to July 2009 and again in February to April 2010. Based on the physiological behavior of oil palm trees, the El Nino phenomenon will affect production in'' six to 12 months, which was in 1H10 and again after 22 to 24 months, which is 2H11.
The delayed El Nino effect is expected to provide short-term support for the crude palm oil (CPO) price, helping to realise our projected average price of RM3,200 per tonne for 2011. The projection now appears to be on the slightly conservative side. The year-to-date average is RM3,334 per tonne as at Monday. Based on our average price assumption, the implied CPO price average for the rest of 2011 is about RM2,700 per tonne. CPO price traded at RM2,864 per tonne on Monday and the RM2,700 level should be the short-term support.
The La Nina phenomenon in early 2011 helped to ease the moisture stress of palm oil trees caused by dry weather conditions in February to April 2010. Therefore, CPO production is expected to recover in 2011, having recovered sharply in 2Q11 and 3Q11. CPO production in 2Q11 jumped 40.8%quarter-on-quarter to 5.03 million tonnes; in 3Q11 it rose by 5.2% q-o-q to 5.29 million tonnes.
Plantation companies under our coverage are expected to enjoy an average of 34.4% earnings growth in FY11 mainly benefiting from higher forecast average CPO price and higher projected output.
According to the head of Commodity Derivatives Product Development of Bursa Malaysia, the bourse is planning to introduce RBD Palm Olein futures that can be used by refiners to lock in refining margins. Refiners are currently using CPO futures to hedge against CPO price volatility in the market. The product is expected to be on the market in 2012.
We remain 'neutral' on the sector given that output is expected to moderately recover and production is expected to resume its normal production cycle in 2012. We continue to like Sime Darby Bhd ('buy', target price: RM9.05) because of its huge landbank that will translate into 7.5% fresh fruit bunch (FFB) growth and 8.3% CPO growth in FY12. We are also maintaining our 'buy' recommendations on TH Plantations Bhd (TP: RM2.26) due to its stable dividend payout and TSH Resources Bhd (TP: RM3.54) due to its large immature areas that are expected to provide 23.6% FFB growth in FY12. ' MIDF Research, Oct 18
This article appeared in The Edge Financial Daily, Ocotber 19, 2011.
Company Name: TH PLANTATIONS BHD
| Research House: MIDF | Price Call: BUY | Target Price: 2.26 |
Plantation sector
Maintain neutral: In an analysis of palm oil production and the impact on prices for 2011/12, Ling Ah Hong, director of Ganling Sdn Bhd, said bad weather does not affect production immediately, and he is expecting delayed El Nino effects in 4Q11 and 1Q12.
The prolonged La Nina and El Nino can affect palm oil production for as long as 24 months after its occurrence.
Peninsular Malaysia experienced a prolonged drought from May to July 2009 and again in February to April 2010. Based on the physiological behavior of oil palm trees, the El Nino phenomenon will affect production in'' six to 12 months, which was in 1H10 and again after 22 to 24 months, which is 2H11.
The delayed El Nino effect is expected to provide short-term support for the crude palm oil (CPO) price, helping to realise our projected average price of RM3,200 per tonne for 2011. The projection now appears to be on the slightly conservative side. The year-to-date average is RM3,334 per tonne as at Monday. Based on our average price assumption, the implied CPO price average for the rest of 2011 is about RM2,700 per tonne. CPO price traded at RM2,864 per tonne on Monday and the RM2,700 level should be the short-term support.
The La Nina phenomenon in early 2011 helped to ease the moisture stress of palm oil trees caused by dry weather conditions in February to April 2010. Therefore, CPO production is expected to recover in 2011, having recovered sharply in 2Q11 and 3Q11. CPO production in 2Q11 jumped 40.8%quarter-on-quarter to 5.03 million tonnes; in 3Q11 it rose by 5.2% q-o-q to 5.29 million tonnes.
Plantation companies under our coverage are expected to enjoy an average of 34.4% earnings growth in FY11 mainly benefiting from higher forecast average CPO price and higher projected output.
According to the head of Commodity Derivatives Product Development of Bursa Malaysia, the bourse is planning to introduce RBD Palm Olein futures that can be used by refiners to lock in refining margins. Refiners are currently using CPO futures to hedge against CPO price volatility in the market. The product is expected to be on the market in 2012.
We remain 'neutral' on the sector given that output is expected to moderately recover and production is expected to resume its normal production cycle in 2012. We continue to like Sime Darby Bhd ('buy', target price: RM9.05) because of its huge landbank that will translate into 7.5% fresh fruit bunch (FFB) growth and 8.3% CPO growth in FY12. We are also maintaining our 'buy' recommendations on TH Plantations Bhd (TP: RM2.26) due to its stable dividend payout and TSH Resources Bhd (TP: RM3.54) due to its large immature areas that are expected to provide 23.6% FFB growth in FY12. ' MIDF Research, Oct 18
This article appeared in The Edge Financial Daily, Ocotber 19, 2011.
June 15, 2011
THPLANT - Bullish on corn and rapeseed, bearish for CPO
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
Research House: RHB
Plantation sector
Maintain neutral: Malaysia's CPO production rose substantially in May by 13.7% month-on-month (m-o-m), while exports rose by 4.3% m-o-m. On a year-on-year (y-o-y) basis, the recovery is stronger, as production rose by 25.6% y-o-y, although exports rose by a smaller 2.7% y-o-y.
As a result of the larger increase in production vis-a-vis exports and the 53% m-o-m increase in CPO imports in May, closing CPO stock levels rose 14.8% m-o-m to 1.92 million tonnes in May (from 1.67 million tonnes in Apr). On a y-o-y basis, CPO stocks rose by a higher 22.8%.
As a result of the higher CPO stock levels, the stock/usage ratio in May rose to 11.15% (from 9.98% in Apr), and is now closer to the high end of historical scale of between 6.4% and 12.7%, quite a lot above the 9.1% historical average.
News flow from the global vegetable oil market has been mixed, with bullish factors for other vegetable oils like soybean, corn and rapeseed, and bearish factors for CPO and wheat. There continues to be production risk in northern US for corn and soybean, while conditions for growth of rapeseed in Europe are deteriorating due to insufficient rains.
In Malaysia and Indonesia, CPO production continues on its strong recovery trek, leading to rising stock levels in the midst of mediocre exports from Malaysia, while in Russia and Ukraine, wheat and grain crops are turning out higher than expected, leading to potential trade policy changes.
To complicate matters further, crude oil prices have fallen to below the crucial US$100 (RM303) a barrel mark again, thus increasing the bearish sentiment for CPO. CPO prices fell to as low as RM3,271 a tonne in the beginning of this week, down about 4% from last month's average of RM3,400.
Risks: (1) a significant change in crude oil price trend; (2) weather abnormalities; (3) change in emphasis on implementing global biofuel mandates and trans-fat policies; (4) significant changes in trade policies of vegetable oil importing or exporting countries; and (5) a sharper-than-expected global economic slowdown.
No change to our forecasts and CPO price assumptions of RM3,100 a tonne for 2011 and RM2,900 a tonne for 2012.
We maintain our 'neutral' stance on the sector, with 'outperform' on Sime Darby, TH Plantations, First Resources and CBIP; 'market perform' on KLK, Genting Plantations and IJM Plantations; and 'underperform' on IOI Corp. ' RHB Research, June 15
This article appeared in The Edge Financial Daily, June 16, 2011.
Company Name: TH PLANTATIONS BHD
Research House: RHB
Plantation sector
Maintain neutral: Malaysia's CPO production rose substantially in May by 13.7% month-on-month (m-o-m), while exports rose by 4.3% m-o-m. On a year-on-year (y-o-y) basis, the recovery is stronger, as production rose by 25.6% y-o-y, although exports rose by a smaller 2.7% y-o-y.
As a result of the larger increase in production vis-a-vis exports and the 53% m-o-m increase in CPO imports in May, closing CPO stock levels rose 14.8% m-o-m to 1.92 million tonnes in May (from 1.67 million tonnes in Apr). On a y-o-y basis, CPO stocks rose by a higher 22.8%.
As a result of the higher CPO stock levels, the stock/usage ratio in May rose to 11.15% (from 9.98% in Apr), and is now closer to the high end of historical scale of between 6.4% and 12.7%, quite a lot above the 9.1% historical average.
News flow from the global vegetable oil market has been mixed, with bullish factors for other vegetable oils like soybean, corn and rapeseed, and bearish factors for CPO and wheat. There continues to be production risk in northern US for corn and soybean, while conditions for growth of rapeseed in Europe are deteriorating due to insufficient rains.
In Malaysia and Indonesia, CPO production continues on its strong recovery trek, leading to rising stock levels in the midst of mediocre exports from Malaysia, while in Russia and Ukraine, wheat and grain crops are turning out higher than expected, leading to potential trade policy changes.
To complicate matters further, crude oil prices have fallen to below the crucial US$100 (RM303) a barrel mark again, thus increasing the bearish sentiment for CPO. CPO prices fell to as low as RM3,271 a tonne in the beginning of this week, down about 4% from last month's average of RM3,400.
Risks: (1) a significant change in crude oil price trend; (2) weather abnormalities; (3) change in emphasis on implementing global biofuel mandates and trans-fat policies; (4) significant changes in trade policies of vegetable oil importing or exporting countries; and (5) a sharper-than-expected global economic slowdown.
No change to our forecasts and CPO price assumptions of RM3,100 a tonne for 2011 and RM2,900 a tonne for 2012.
We maintain our 'neutral' stance on the sector, with 'outperform' on Sime Darby, TH Plantations, First Resources and CBIP; 'market perform' on KLK, Genting Plantations and IJM Plantations; and 'underperform' on IOI Corp. ' RHB Research, June 15
This article appeared in The Edge Financial Daily, June 16, 2011.
February 22, 2011
THPLANT - TH Plantations a value buy
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
Research House: MIDF
TH Plantations Bhd
(Feb 22, RM1.97)
Maintain buy at RM1.90 with unchanged target price RM3.25: THP's earnings of RM89.5 million in FY10 were ahead of our expectations by 2.5%. Net profit'' in 4QFY10 surged 98% quarter-on-quarter and'' 89% year-on-year to RM42.6 million'' despite lower crude palm oil (CPO)output, which was more than made up for by higher CPO prices. ''
THP's full-year fresh fruit bunch (FFB) production of 463,949 tonnes was 4% lower than our projection due to heavy rainfall,'' especially in Peninsular Malaysia. FFB and CPO output in FY10 dropped 11% and 8% respectively. ''
Net profit margin increased significantly'' by 6.78 percentage points'' from 17.7% in FY09 to 24.5% in FY10. The higher margin'' was due to the higher CPO price realised and a drop in cost of sales by 1.2% y-o-y to RM200.6 million. ''
We remain positive on the future growth of THP on the back of: (i) the targeted replanting policy of 1,500ha annually; (ii)'' increase in mature hectarage; (iii) additional mill in Saribas that will increase CPO production; and (iv) future expansion to Indonesia. ''
TH Plantations is a value buy in our opinion, with the share price having retraced 14% from its'' recent high of RM2.22 (Jan 12). THP has strong growth potential given the expansion plan in Indonesia. Hence, we maintain our 'buy' recommendation at an unchanged target price of RM3.25. This is derived from a FY11 PER of 14.6 times, one standard deviation above its'' 5-year historical PER of 11.2 times. However, given the more sedate market sentiment towards plantation stocks, we are'' likely to adjust the basis of our valuation in due course. There is therefore a downward bias to our target price. ' MIDF Research, Feb 22
This article appeared in The Edge Financial Daily, February 23, 2011.
Company Name: TH PLANTATIONS BHD
Research House: MIDF
TH Plantations Bhd
(Feb 22, RM1.97)
Maintain buy at RM1.90 with unchanged target price RM3.25: THP's earnings of RM89.5 million in FY10 were ahead of our expectations by 2.5%. Net profit'' in 4QFY10 surged 98% quarter-on-quarter and'' 89% year-on-year to RM42.6 million'' despite lower crude palm oil (CPO)output, which was more than made up for by higher CPO prices. ''
THP's full-year fresh fruit bunch (FFB) production of 463,949 tonnes was 4% lower than our projection due to heavy rainfall,'' especially in Peninsular Malaysia. FFB and CPO output in FY10 dropped 11% and 8% respectively. ''
Net profit margin increased significantly'' by 6.78 percentage points'' from 17.7% in FY09 to 24.5% in FY10. The higher margin'' was due to the higher CPO price realised and a drop in cost of sales by 1.2% y-o-y to RM200.6 million. ''
We remain positive on the future growth of THP on the back of: (i) the targeted replanting policy of 1,500ha annually; (ii)'' increase in mature hectarage; (iii) additional mill in Saribas that will increase CPO production; and (iv) future expansion to Indonesia. ''
TH Plantations is a value buy in our opinion, with the share price having retraced 14% from its'' recent high of RM2.22 (Jan 12). THP has strong growth potential given the expansion plan in Indonesia. Hence, we maintain our 'buy' recommendation at an unchanged target price of RM3.25. This is derived from a FY11 PER of 14.6 times, one standard deviation above its'' 5-year historical PER of 11.2 times. However, given the more sedate market sentiment towards plantation stocks, we are'' likely to adjust the basis of our valuation in due course. There is therefore a downward bias to our target price. ' MIDF Research, Feb 22
This article appeared in The Edge Financial Daily, February 23, 2011.
Subscribe to:
Posts (Atom)