Stock Name: CBIP
Company Name: CB INDUSTRIAL PRODUCT HOLDING
Stock Name: TWSPLNT
Company Name: TRADEWINDS PLANTATION BHD
Hong Leong Investment Bank (HLIB) is maintaining its 'neutral' stance on the plantation sector given the unattractive valuation, in particular, the bigger plantation players relative to their regional peers.
In a research note today, HLIB said although Malaysia started as a leader in palm biodiesel, its production growth underperformed the global diesel output, in particular, Colombia, Thailand and Indonesia.
"This is due to weaker cost competitiveness because of duty differential disadvantage against Indonesia and Argentina that has impaired its price competitiveness in the export market," it said.
It said another factor was the slow pace of B5 implementation.
An industry expert believed that several measures were required to ensure higher biodiesel consumption locally, it said.
Meanwhile, HLIB said it would keep average crude palm oil (CPO) price forecast of RM3,000 a tonne for this year, at the lower-end of the projected price range of RM3,000 to RM4,500, for three reasons.
It said the CPO price would likely weaken once La Nina subsided (expected by mid-2012).
"The current global economic headwinds may curb demand and prices of palm oil and the CPO production recovery is expected to begin this month," it said.
HLIB said the CPO prices would be supported by the lower-than-expected soyabean yield, resulting in higher soyabean prices, hence boosting prices of CPO.
It has put a 'buy' call on CB Industrial Product Holding Bhd and Tradewinds Plantation Bhd with target prices of RM3.03 and RM5.04, respectively. -- BERNAMA
Company Name: CB INDUSTRIAL PRODUCT HOLDING
| Research House: HLG | Price Call: BUY | Target Price: 3.03 |
Stock Name: TWSPLNT
Company Name: TRADEWINDS PLANTATION BHD
| Research House: HLG | Price Call: BUY | Target Price: 5.04 |
Hong Leong Investment Bank (HLIB) is maintaining its 'neutral' stance on the plantation sector given the unattractive valuation, in particular, the bigger plantation players relative to their regional peers.
In a research note today, HLIB said although Malaysia started as a leader in palm biodiesel, its production growth underperformed the global diesel output, in particular, Colombia, Thailand and Indonesia.
"This is due to weaker cost competitiveness because of duty differential disadvantage against Indonesia and Argentina that has impaired its price competitiveness in the export market," it said.
It said another factor was the slow pace of B5 implementation.
An industry expert believed that several measures were required to ensure higher biodiesel consumption locally, it said.
Meanwhile, HLIB said it would keep average crude palm oil (CPO) price forecast of RM3,000 a tonne for this year, at the lower-end of the projected price range of RM3,000 to RM4,500, for three reasons.
It said the CPO price would likely weaken once La Nina subsided (expected by mid-2012).
"The current global economic headwinds may curb demand and prices of palm oil and the CPO production recovery is expected to begin this month," it said.
HLIB said the CPO prices would be supported by the lower-than-expected soyabean yield, resulting in higher soyabean prices, hence boosting prices of CPO.
It has put a 'buy' call on CB Industrial Product Holding Bhd and Tradewinds Plantation Bhd with target prices of RM3.03 and RM5.04, respectively. -- BERNAMA
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