Affin Hwang mantains buy on FGV


FGV said in a statement yesterday that the allegations in a video, which was posted on YouTube, had caused much confusion and concern.

KUALA LUMPUR: Felda Global Ventures Holdings Bhd's plantation division earnings are expected to continue growing in 2018-20E on the back of rising fresh fruit bunch (FFB) and crude palm oil (CPO) production, said Affin Hwang Capital Research.

The research house maintained its buy call on FGV and target price of RM2.26 based on an unchanged 25x price-earnings on its 2018E core earnings per share.

It said the rising prime-matured palm-tree areas and lower production costs are expected to offset the dip in CPO prices. 

"We expect FGV to be on track to achieve an ideal palm-tree age profile of 12-13 years by 2020 through an annual replanting programme of about 3-6% of its planted landbank," said the research firm in its Wednesday report.

"Based on our sensitivity analysis, a RM50-150/MT move in CPO prices could affect core EPS by 10-33% in FY18-20E. A swing in FFB yields by 0.25-1.0MT/ha would impact 2018-20E core EPS by 2-11%, while a change in the oil-extraction rate (OER) of 0.25-1.0% would affect core EPS by 2-9%."

Meanwhile, Affin Hwang Research said it expects subsidiary MSM Malaysia Holdings to generate better earnings in 2018E from fabourable raw materials costs and stronger ringgit, though it said there could be some downside risk from the new refinery.

Get 30% off with our ads free Premium Plan!

Monthly Plan

RM13.90/month
RM9.73 only

Billed as RM9.73 for the 1st month then RM13.90 thereafters.

Annual Plan

RM12.33/month
RM8.63/month

Billed as RM103.60 for the 1st year then RM148 thereafters.

1 month

Free Trial

For new subscribers only


Cancel anytime. No ads. Auto-renewal. Unlimited access to the web and app. Personalised features. Members rewards.
Follow us on our official WhatsApp channel for breaking news alerts and key updates!
   

Next In Business News

Gaming stocks on track for recovery in 2025
iCents Group Holdings eyes listing on ACE Market
Infrastructure growth to support telecoms players
India regulators puncture a 10,000% stock rally
Amicorp denies 1MDB’s asset recovery claim
MMAG buys aircraft for RM21mil
Infrastructure and DC projects set to boost construction
Dividend galore for PNB’s unit trust holders
Beijing agrees to issue US$411bil treasury bond
Pan Merchant eyes ACE Market listing

Others Also Read