(FNH MK/HOLD/RM24.88/Target: RM23.00)

2QFY17 results were slightly above expectations. Dairies Thailand’s strong 62% yoy EBIT growth more than offset lacklustre results from its Malaysia operations which saw EBIT fall 25.9% yoy. A much lower effective tax rate of 9.1% (2QFY16: 18.8%) lifted core net profit by 18.2% yoy. We raise FY17-19 net profit forecasts by 4.0-5.4%. An interim DPS of 27 sen was declared (2QFY16: 27 sen). Maintain HOLD. Target price: RM23.00. Entry price: RM21.00.

Source: UOB Kay Hian Research - 4 May 2017