Affin Daily Insight (LV) - 4 April 2014 - FGV / OIL & GAS / DMR

Top Calls

Company Update � Felda Global Ventures (ADD, maintain) - Growing through yield improvements and acquisitions We visited the Pontian United Plantations (PUP) estates and FGV Group�s Sahabat estates in Sabah on 1-2 April, and were impressed by management�s focus on improving operational efficiencies and enhancing FFB and oil yields. PUP�s FFB yield has been consistently high and is expected to trend higher through replanting with high-yielding planting materials. The Sahabat estates showed no signs of the March 2013 Suluk invasion. Operationally, the FFB yield of the Sabah estates is above the group average and aggressive replanting with high-yielding planting materials is also expected to push FFB yield higher. The group has been explicit in its intention to acquire more land bank as well as related businesses both in Malaysia and overseas. Subject to valuation and price paid, we are generally positive on the group utilising its massive cash reserve (end-Dec 2013: RM5.0bn) for strategic and synergistic acquisitions while waiting for the longer-term impact from its aggressive replanting programme of 15,000 ha p.a. We maintain our FY14-16 profit forecasts and ADD rating with a price target of RM4.95.

Other Calls

Sector Update � Oil & Gas (OVERWEIGHT, maintain) - RAPID gets go-ahead

Debt Market Research - Staying sidelined for SPK auctions and US NFP

Morning News & Market Summary

For important disclosures, please refer to the Disclosure section at the end of the individual linked research reports.

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