Thursday, December 12, 2013

First Resources : Our pick of the crops (CIMB)

First Resources
Current S$2.23
Target S$2.75
Our pick of the crops

First Resources is our top pick among the regional planters due to its superior operating efficiency over peers, strong FFB output growth prospects and attractive P/E valuations compared to peers. It is also expected to gain additional income from its refinery expansion in 2014.

We project that the group’s free cashflow will improve in FY14 due to the higher operating cashflow and lower capex spend. This could lead to better dividend payouts. Under our new rating structure, our rating changes from Outperform to Add. We maintain our S$2.75 target price, based on 12.3x CY14 P/E (1 s.d. above its  4-year mean). The re-rating catalysts are its strong FFB production and higher dividends.


Efficient and young estates
First Resources' young estate profile (average age of eight years) is one of the group’s key strengths. The young estates will boost future output growth and counter the cost increases resulting from the rising minimum wage in Indonesia. We forecast 20% FFB output growth from its nucleus estates in FY14, led by the new mature areas, improving yields from the recently-acquired estates that the group is rehabilitating and existing estates, which are projected to recover from the low production cycle or tree stress. First Resources’ superior operating metrics enable the group to produce CPO at a lower cost per tonne (US$260-280) and generate higher profit per mature ha than its peers. We expect higher output and better CPO prices to drive its FY14 earnings. We are more bullish on the CPO price prospects in 2014 due to the lower palm oil stockpiles and rising biodiesel demand from Indonesia.

Better downstream earnings
As part of its downstream expansion, the group added a new 600k-tonne refinery in 2H13. This will raise its refining capacity to 850k tonnes, allowing the group to refine all of its CPO in-house and extract better profit margins for its palm products. Its biodiesel plant in Indonesia stands to benefit from the higher demand in the country following the government’s moves to raise its biodiesel mandates.

Lighter capex in 2014
We project that the group's capex will taper in FY14 once its refinery expansion is completed. As such, there could be room for higher dividend payouts in 2014. Our current forecast assumes a 30% dividend payout ratio.




Source/Extract/Excerpts/来源/转贴/摘录: CIMB-Research,
Publish date: 02/12/13

No comments:

Post a Comment

Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)
“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock