A slightly improved quarter. 2QFY12 net profit more than doubled QoQ (+124%) to RM578m (+11% YoY). Excluding exceptionals, core net profit was RM533m (+5% QoQ, +18% YoY), within expectations. We raise our FY12-14 net profit forecasts by 4.5-6.4% to reflect a higher CPO ASP assumption of RM2,800/t (+7.7%; from RM2,600/t) for 2012-13, on poorer South American crop prospects. Despite our raised earnings, IOI remains a Hold. Our new TP is RM5.33 (+4%), based on 16x CY13 PER (previously RM5.14 on 16x FY13 PER).

Maybank Research - 24 Feb 2012

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