Boustead (Buy) - The Future Is Brighter Ahead

Stock Name: BSTEAD
Company Name: BOUSTEAD HOLDINGS BHD

Research House: HLG

Price Call: BUY

Target Price: 6.20

Boustead (Buy)

The Future Is Brighter Ahead

• FY11 core results (excluding exceptional) below HLIBand consensus expectations due to the heavy industry division (cost escalationand lapse in new contract) and lower plantation contribution in 4Q.
• 4^th interim single-tier dividend of 9 sen,making total of 29 sen, below our projection of 34.5 sen but not disappointingis add the dividend in species of Pharmaniaga shares.
• Despite the earnings disappointment, the new petrol vessel contract andmaiden full year contribution from Pharmaniaga will revive earnings expansionfrom FY12 onwards.
• Rare stock that provide earnings growth and high yield.
• FY12-13 forecasts cut by 7-9% following the results.
• Maintain Buy.
• Target price raised to RM6.20 (10% discount to estimated SOP of RM6.89)from RM5.91, incorporating our higher TP for Affin, latest BHIC price andfine-tuning post FY11 results.

Source: HLIB Research 28 Feb 2012