Wednesday, February 23, 2011

CIMB Research: Genting Plantations met expectations, stock remains a Neutral

KUALA LUMPUR: CIMB Equities Research said Genting PLANTATION []s' financial results met its expectations.

It said on Wednesday, Feb 23 that net profit was just 0.5% below its forecast though it missed consensus by 4%.

The research house said the small variance relative to its numbers was due mainly to higher losses from its Indonesian estates.

Genting Plantations declared a special dividend of three sen and final dividend of 5.5 sen, leading to a full-year dividend of 12.5 sen, a shade below CIMB Research's 13 sen forecast.

On Tuesday, Genting Plantations, benefiting from the surge in crude palm oil (CPO) prices, reported its fourth quarter earnings rose 31.1% to RM102.76 million from RM78.35 million a year ago.

Revenue increased by 23.3% to RM296.70 million in the quarter ended Dec 31, 2010 from RM240.56 million while earnings per share were 13.54 sen compared with 10.34 sen.

'We are keeping our earnings forecasts and target price of RM9.06, based on a 10% discount to SOP. The stock remains a NEUTRAL as we feel its premium P/E ratings already reflects the group's major expansion plan for Indonesia and the strong earnings prospects in the current year.

'For exposure to the Malaysian plantation sector, we continue to prefer Sime Darby,' it said.

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