STOCK FOCUS OF THE DAY
Gents Plantations : Negative news priced in; brighter days ahead BUY
We are upgrading Genting Plantations (GenP) from HOLD to BUY with a higher fair value of RM11.50/share (vs. RM10.65/share previously). GenP's share price has dropped by 10% from the peak of RM11.579/share on 30 March 2017. We believe that the fall in GenP's share price has already reflected the negative earnings impact of the FRS116 accounting standard and the unexciting performance of the palm refinery in Lahad Datu.
Our fair value for GenP is based on an FY18F PE of 27x vs. 25x originally. GenP's PE assumption is at a premium compared with its large-cap peers of 25x as the group has young oil palm trees in Indonesia and its production cost per tonne is the lowest among the companies under our coverage.
Others :
Prestariang : SKIN is no one-trick pony BUY
Econpile Holdings : Bagging RM48mil piling works for Seputeh 9 HOLD
QUICK TAKES
Plantation Sector : News flow for week 2 – 6 October NEUTRAL
STOCKS ON RADAR
TRC Synergy, Econpile Hldgs, Lii Hen Industries, Mieco Chipboard
ECONOMIC HIGHLIGHT
Malaysia : Exports to remain strong
NEWS HIGHLIGHTS
Aeon : Quashes talk of Quill City Mall exit
Choo Bee : Upbeat about steel price rally
Watta : To cease ops of auto battery units
Emico : Hopes ‘revolutionary’ machine will raise revenue
DISCLAIMER:
The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.
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