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Bimbsec - Genp 1qfy12 Result - 20120530

Bimbsec - Genp 1qfy12 Result - 20120530

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Published by: Bimb Sec on May 30, 2012
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05/30/2012

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BIMB SECURITIES RESEARCH
MARKET INSIGHT
Wednesday, 30 May, 2012
Result Review
PP16795/03/2013(031743)
 
| 1
Genting Plantations 
Neutral
◄►
 
Below
 
Slow margin recovery
Price: RM9.00Target Price:
(+5.6%)
RM9.50
g Keat Yung
 
3-26918887 ext 181
 
Genting Plantations revenue of RM272.7m is a marginalincrease of 0.6% y-o-y, thanks largely to favourableproperty sales. Despite with relatively flat revenue, netprofit plunged more than 16.0% to RM78.8m mainly dueto lower palm products selling prices and higheroperation costs in the Plantation segment. As comparedto previous quarter, net profit margins improved by2.5pp to 28.9%. Due to the slow margin recovery we arefine tuning our earnings forecast lower by 4.1% and 2.7%for FY12 and FY13 respectively. Maintain target price atRM9.50. Neutral.Revenue flat, profits declined.
Genting Plantations1QFY12 revenue of RM272.7m is a 0.6% increase y-o-y,thanks to higher sales from property division. Despite theflattish topline growth, net profit dropped 16.5% toRM78.8m as compared to RM94.3m achieved in 1QFY11.The adverse result was mainly due to lower palm productsaverage selling prices and higher operation expenditure inthe Plantation segment.
1QFY11 1QFY12 Change
FFB prod. (‘000mt)
 
267.4 275.1 2.9%
CPO Price (RM/mt)
3,682.0 3,179.0 -13.7%
PKO Price (RM/mt)
3,038.0 1,941.0 -36.1%
Recovery in margin.
Despite the lower profit, we notethat profit margin has improved as compared to theprevious quarter. In comparison, EBIT margin rose 4.4percentage points to 38.4%, whilst net margin improved2.5 percentage points to 28.9%. Despite the improvement,the recovery was below expectation.
Forecast.
 
The Group’s
sales performance was largelywithin expectation, but profit margins were below despitethe improvement. Hence, we have fine tuned downwardour earnings estimates by 4.1% and 2.7% for FY12 andFY13 respectively.
View & Valuation
. Despite the lower earnings estimatesfor FY12 and FY13, we maintain its target price at RM9.50after rolling over to the next 12 months EPS of 58.0 senand applying a 3-year average P/E ratio of 16.4x. Maintain
neutral
.
Stock Data
Bloomberg TickerGENP MKAltman Z-score7.38 Market Cap (RM'mn)6,830YTD price chg5.18 Issued shares (mn)759YTD KLCI chg2.26 52-week high9.84Beta0.87 52-week low6.52 
Major Shareholders
3-mth avg daily volume ('00)8,465Genting Bhd53.63%Free Float31.43EPF14.75%Shariah CompliantYVanguard Group1.23%
Share Performance (%)
1mth3mth12mthAbsolute(4.15)(2.57)14.75  vs. KLCI(4.00)(2.47)11.87 
Financial Highlights
FYE 31 Dec201020112012E2013E2014E
FFB Prod. ('000 mt)1,197.71,372.41,346.61,506.21,633.8Turnover988.61,336.51,330.81,407.71,450.2EBIT424.7577.4546.1600.7610.9Pretax profit439.7601.3568.1616.4623.9
Net Profit324.2442.0421.8457.7463.3
EPS (sen)42.7658.2555.5960.3161.05Gross DPS (sen)12.5016.2516.5017.5018.00Div Yield (%)1.391.811.831.942.00NTA/share (RM)3.534.024.414.835.27PE Ratio21.0515.4516.1914.9214.74EBIT Margin42.96%43.20%41.04%42.67%42.12%Pretax Margin44.48%44.99%42.69%43.78%43.02%Effective tax rate26.27%26.38%25.00%25.00%25.00%ROE11.59%13.96%12.26%12.39%11.53%ROA10.15%11.59%9.84%9.80%9.13%Net Gearing (x)N. CashN. CashN. CashN. CashN. Cash
Growth Ratios
FFB3.39%14.59%-1.88%11.85%8.47%Turnover30.84%35.19%-0.43%5.78%3.01%EBIT45.66%35.97%-5.42%9.99%1.70%Pretax profit45.64%36.75%-5.53%8.50%1.22%Net profit37.57%36.34%-4.57%8.50%1.22%
Share Price Chart
6.36.87.37.88.38.89.39.810.3
     M    a    y  -     1     1     J    u    n  -     1     1     J    u     l  -     1     1     A    u    g  -     1     1     S    e    p  -     1     1     O    c    t  -     1     1     N    o    v  -     1     1     D    e    c  -     1     1     J    a    n  -     1     2     F    e     b  -     1     2     M    a    r  -     1     2     A    p    r  -     1     2
 
 
30 May 2012 Result Review: Genting Plantations 1QFY12
www.bimbsec.com.my
 |
2
 
Quarterly figures
 
FYE 31 Dec (RM'm) Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 QoQ Chg YoY Chg
Revenue 271.1 364.4 344.5 356.5 272.7-23.50.6EBIT 132.3 191.0 151.5 121.1 104.7-13.5 -20.9  Pretax profit 132.1 190.9 150.7 127.6 104.0-18.5 -21.3  Taxation-37.3 -49.8 -37.5 -34.1 -26.7 -21.7 -28.3  Minority interest-0.5 -1.20.5 0.5 1.5 179.4-411.8  Net Profit 94.3 139.9 113.8 94.0 78.8-16.2 -16.5  EPS (sen) 12.43 18.44 14.99 12.39 10.38-16.2 -16.5  Net gearing (x) N. Cash N. Cash N. Cash N. Cash N. Cash N/A N/AEBIT margin (%) 48.80 52.41 43.98 33.96 38.40 13.1-21.3 PBT margin (%) 48.72 52.40 43.75 35.80 38.15 6.6-21.7 Net margin (%) 34.79 38.39 33.02 26.38 28.90 9.5-16.9 Effective tax rate (%) 28.22 26.09 24.86 26.73 25.69-3.9 -9.0 
Source: BIMB Securities
 
Income Statement
 
FYE 31 Dec (RM'm) 2009 2010 2011 2012E 2013E 2014E
Revenue 755.6 988.6 1,336.5 1,330.8 1,407.7 1,450.2EBITDA 305.2 448.6 617.4 591.5 652.8 669.7
Pretax profit 301.9 439.7 601.3 568.1 616.4 623.9
Tax(64.0) (115.5) (158.7) (142.0) (154.1) (156.0)  MI(2.3)0.0(0.6) (4.3) (4.6) (4.7) 
Net profit 235.7 324.2 442.0 421.8 457.7 463.3
Net profit growth (%)-36.937.6 36.3-4.68.5 1.2 EPS (sen) 31.1 42.8 58.3 55.6 60.3 61.0EPS growth (%)-36.937.4 36.2-4.68.5 1.2 Gross DPS (sen) 9.0 12.5 16.3 16.5 17.5 18.0Dividend yield (%) 1.00 1.39 1.81 1.83 1.94 2.00NTA/share (RM) 2.78 3.53 4.02 4.41 4.83 5.27Net gearing (x) N. Cash N. Cash N. Cash N. Cash N. Cash N. CashPER (x) 28.92 21.05 15.45 16.19 14.92 14.74P / NTA (x) 3.24 2.55 2.24 2.04 1.86 1.71ROE (%) 9.44 11.59 13.96 12.26 12.39 11.53ROA (%) 8.68 10.15 11.59 9.84 9.80 9.13
Source: BIMB Securities
 
Balance Sheet
 
FYE 31 Dec (RM'm) 2009 2010 2011 2012E 2013E 2014E
Current assets 889.1 1,108.8 1,406.9 1,459.1 1,544.8 1,609.5Non-current assets 1,978.4 2,413.1 2,699.0 3,005.0 3,331.5 3,665.6
Total Assets 2,867.6 3,522.0 4,105.9 4,464.1 4,876.3 5,275.1
Current liabilities 133.3 201.5 231.0 149.8 145.0 157.9Non-current liabilities 119.1 340.9 523.0 662.8 751.6 807.6Shareholders' fund 2,548.1 2,868.7 3,234.2 3,530.9 3,855.7 4,182.4Minority interest 67.1 110.9 117.6 120.6 123.9 127.2
Equity & liabilities 2,867.6 3,522.0 4,105.9 4,464.1 4,876.3 5,275.1
Source: BIMB Securities
 

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