FW: AmBank Research - Genting Plantations: Sound fundamentals but hit by weak industry dynamics HOLD, 13 Apr 2018

 

 

STOCK FOCUS OF THE DAY

Genting Plantations: Sound fundamentals but hit by weak industry dynamics     HOLD

 

We like Genting Plantations (GenP). The group has one of the lowest cost of production per tonne in Malaysia and young oil palm trees in Indonesia. However due to languishing CPO prices, we believe that GenP would not be able to trade at premium valuations anymore.

 

As such, we have revised our FY19F fully diluted PE assumption in arriving at GenP’s fair value from 27x to 25x. We have also reduced GenP’s FY18F net profit by 7.8% to account for a weaker average CPO price assumption of RM2,450/tonne vs. RM2,650/tonne previously. Following these, we are downgrading GenP from BUY to HOLD with a lower fair value of RM10.75/share vs. RM11.50/share previously.

 

Others :

Kerjaya Prospeck: Secures RM357mil BBCC building job                                                 HOLD

 

 

 

RETAIL RESEARCH

Stocks On Radar: HSS Engineering, D&O Green Technologies, Malaysia Marine and Heavy Engineering, Euro Holdings  

 

 

FOREIGN EXCHANGE

USD/JPY: Expect slight softening before regaining strength

 

 

NEWS HIGHLIGHTS

Bio Osmo: Buys Impiana in RTO deal

IHH: Surprises market with Fortis takeover offer

Boustead Holdings: Sees 20% profit growth in FY18

IPO: Mi Equipment offering 152.9m shares

 

 

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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