KUALA LUMPUR: Shares of KUALA LUMPUR KEPONG BHD [] (KLK) saw RM491 million erased from its market capitalisation when it shares came under some selling pressure on Wednesday, Feb 9.
It fell 46 sen to RM22.10 with 3.36 million shares done. Based on the issued shares of 1,067.505 million shares, the decline in the share price translated to a decline of RM491 million in market capitalisation on Wednesday.
RHB Research had trimmed its forecasts for KLK by 8.1%-9.6% for FY09/11-13. 'Post-earnings revision, we reduced our SOP-based fair value for KLK to RM25.95 (from RM27.35), but maintain our Outperform rating,' it said.
The research house said after a stellar FY09/10, KL Kepong recorded a 10.4% on-year drop in production in 1QFY11, due mainly to the impact of wet weather which affected harvesting activities.
It said KLK was not alone as all Malaysian planters under its coverage recorded lower fresh fruit bunches (FFB) production during the quarter, ranging from -8% to as high as -23% on-year.
'Despite this, management is sticking to its 10% FFB growth target for FY09/11 for now, expecting productivity to improve in the next few quarters,' it said.
However, RHB Research said it prefered to be more conservative and adjusted down its FFB yield projections by 0.5 tonnes per ha to between 23 tonnes and 24 tonnes for FY11-13 (from 24 tonnes to 25 tonnes previously), resulting in FFB production growth of 8.5% for FY11, 4.7% for FY12 and 6.3% for FY13.
RHB Research said one bright spot is KLK's 22,787ha of rubber PLANTATION []s, which in FY09/10 yielded an operating profit per mature ha of RM6,718/ha (with average price of RM9.80/kg), not too far from its CPO division's RM7,061/ha.
It fell 46 sen to RM22.10 with 3.36 million shares done. Based on the issued shares of 1,067.505 million shares, the decline in the share price translated to a decline of RM491 million in market capitalisation on Wednesday.
RHB Research had trimmed its forecasts for KLK by 8.1%-9.6% for FY09/11-13. 'Post-earnings revision, we reduced our SOP-based fair value for KLK to RM25.95 (from RM27.35), but maintain our Outperform rating,' it said.
The research house said after a stellar FY09/10, KL Kepong recorded a 10.4% on-year drop in production in 1QFY11, due mainly to the impact of wet weather which affected harvesting activities.
It said KLK was not alone as all Malaysian planters under its coverage recorded lower fresh fruit bunches (FFB) production during the quarter, ranging from -8% to as high as -23% on-year.
'Despite this, management is sticking to its 10% FFB growth target for FY09/11 for now, expecting productivity to improve in the next few quarters,' it said.
However, RHB Research said it prefered to be more conservative and adjusted down its FFB yield projections by 0.5 tonnes per ha to between 23 tonnes and 24 tonnes for FY11-13 (from 24 tonnes to 25 tonnes previously), resulting in FFB production growth of 8.5% for FY11, 4.7% for FY12 and 6.3% for FY13.
RHB Research said one bright spot is KLK's 22,787ha of rubber PLANTATION []s, which in FY09/10 yielded an operating profit per mature ha of RM6,718/ha (with average price of RM9.80/kg), not too far from its CPO division's RM7,061/ha.
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