(KLK MK/HOLD/RM24.84/Target: RM23.80)

KLK’s 2QFY17 results were above our expectations as production recovery was stronger than our expectations. We are revising our FY17 FFB production growth estimate upwards to +10.5% yoy (from +4.3% yoy previously) to factor in the strong production recovery. Thus, our FY17 earnings estimate is adjusted upwards by 10%. KLK declared an interim single-tier dividend of 15 sen/share or yield of 0.6%. Maintain HOLD. Target price: RM23.80. Entry price: RM22.30.

Source: UOB Kay Hian Research - 23 May 2017