3Q FY2018 RESULTS UPATE

We are recommending a SELL on QL Resources Bhd with a TP of RM 4.40 per share which translates to a forecasted P/E of 34 times and P/B of 4.0 times based on estimated full year results  FY 2018

BUSINESS SUMMARY

A highly diversified company with three key activities.

1. QL Resources Bhd has three main divisions

a) Integrated livestock farming – Leading operator of animal feed and poultry farming. The company produces approximately 4.6 million eggs a day, 40 million day old chicks and 20 million broilers annually, from farms in Malaysia and Indonesia.

The group also operates a chain of convenience stores under the name FamilyMart from November 2016 onwards.  Based on the annual report for FY 2017, the group reported there are 14 convenience stores to-date.

b) Marine products manufacturing - consists of upstream and downstream activities including deep sea fishing, aquaculture farming, surimi and fishmeal production and consumer goods.

c) Palm oil activities – The company owns two independent palm oil mills in Sabah, East Malaysia and 1,200 hectares of plantation in Sabah and 15,000 hectares of plantation in East Kalimantan, Indonesia.