KUALA LUMPUR: Shares of KL Kepong slipped in thin trade on Wednesday, Feb 9 while RHB Research Institute reduced its sum-of-parts fair value to RM25.95 from RM27.35 after trimming its earnings forecasts.
At 9.28am, KLK was down 10 sen to RM22.46 with just 9,500 shares done.
The FBM KLCI was just up 0.91 of a point to 1,540.46. Turnover was 314.99 million shares valued at RM202.75 million. There were 183 gainers, 168 losers and 193 stocks unchanged.
RHB Research 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. We prefer to be more conservative, and are adjusting down our FFB yield projections by 0.5t/ha to 23-24t/ha for FY11-13 (from 24-25t/ha previously), resulting in FFB production growth of 8.5% for FY11, 4.7% for FY12 and 6.3% for FY13,' it said.
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.
' We trim our forecasts 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.
At 9.28am, KLK was down 10 sen to RM22.46 with just 9,500 shares done.
The FBM KLCI was just up 0.91 of a point to 1,540.46. Turnover was 314.99 million shares valued at RM202.75 million. There were 183 gainers, 168 losers and 193 stocks unchanged.
RHB Research 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. We prefer to be more conservative, and are adjusting down our FFB yield projections by 0.5t/ha to 23-24t/ha for FY11-13 (from 24-25t/ha previously), resulting in FFB production growth of 8.5% for FY11, 4.7% for FY12 and 6.3% for FY13,' it said.
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.
' We trim our forecasts 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.
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