KUALA LUMPUR: Hwang DBS Vickers Research (HDBSVR) expects TSH RESOURCES BHD []'s earnings to grow to RM125 million in FY13F from RM60 million in FY10F, premised on c.15,000 ha of young trees maturing over the period.
It said on Thursday, Jan 13 the fresh fruit bunches (FFB) volume is projected to register 24% CAGR to 540,000 tons by FY13F.
'There is also potential upside from higher yields, if TSH employ Wakuba ramet (high quality clone) that can yield 38MT/ha of FFB in prime years (vs. c.22MT/ha now). We understand TSH has started small scale new planting of Wakuba,' it said.
HDBSVR said TSH, despite its high gearing, the cash flow is strong. 'We remain positive on TSH despite its relatively high gearing (90% as at September 2010),' it said.
It raised the target price to RM3.40 after imputing lower capex. Valuations are undemanding currently at 14x PE FY11F EPS, the cheapest in the reseach house coverage of Malaysia PLANTATION []s and below sector average of 18x.
'TSH's FY10-13F FFB CAGR of 24% is also the strongest in our regional universe,' it said.
It said on Thursday, Jan 13 the fresh fruit bunches (FFB) volume is projected to register 24% CAGR to 540,000 tons by FY13F.
'There is also potential upside from higher yields, if TSH employ Wakuba ramet (high quality clone) that can yield 38MT/ha of FFB in prime years (vs. c.22MT/ha now). We understand TSH has started small scale new planting of Wakuba,' it said.
HDBSVR said TSH, despite its high gearing, the cash flow is strong. 'We remain positive on TSH despite its relatively high gearing (90% as at September 2010),' it said.
It raised the target price to RM3.40 after imputing lower capex. Valuations are undemanding currently at 14x PE FY11F EPS, the cheapest in the reseach house coverage of Malaysia PLANTATION []s and below sector average of 18x.
'TSH's FY10-13F FFB CAGR of 24% is also the strongest in our regional universe,' it said.
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