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