Top Story : QL Resources – Pathway paved for QL’s next growth phase Outperform
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- 74.5%-owned plantation in Indonesia is expected to start contributing more meaningfully to the plantation division (>60% of plantation earnings) by FY13 arising from the maturing age profile of its plants and milling profits from CPO mill in Indonesia.
- QL targets to enlarge its eggs product to 4.0m eggs/day (+60%) by FY13. This would come from its expansion plans in Malaysia (+0.5m (+20%) in FY11), Indonesia (+0.5m (+20%) in FY12) and Vietnam (+0.5m (+20%) by end-FY12).
- Started construction of surimi plant in Indonesia which has 2 lines with a total initial capacity of 5,000mt p.a.. Earnings contribution from this new plant is expected to come in by early-FY12.
- Our FY11-13 earnings forecasts have been reduced by 0.1-5.0% p.a. after: 1) tweaking our earnings model; 2) assuming earnings for Indonesia and Vietnam operations only come in by mid- to end-FY12 instead of early-FY12 previously; and 3) increasing our capex assumptions.
- Our fair value has been increased to RM4.90 (from RM4.60) based on higher CY11 PER target of 14.5x (from 13x), to be in line with the consumer sector target PER.
RHB Equity 360° : 8 July 2010 (QL, Banks, Kencana; Technical: Proton) - 08/07/2010
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