For 1Q17, plantation companies are likely to report weaker results qoq, but better performance yoy. The yoy improvement in 1Q17 production was due to the low base in 1Q16 as FFB yield was badly affected by the severe drought in 2015. Meanwhile, refining margin is expected to improved yoy as increase in supply should see higher utilisation rate. For qoq, results will be partly affected by the decline in PK prices (-2% qoq). Maintain MARKET WEIGHT.

Source: UOB Kay Hian Research - 25 Apr 2017