Plantation and property surprised. Sime's 2QFY12 net profit of RM1,101m (+3% QoQ, +26% YoY) was above our expectation but in line with consensus. We raise FY12-14 forecasts by 9-16% p.a. to reflect higher CPO ASP assumption of RM2,800/t (+7.7%; from RM2,600/t) for 2012-13, mainly on poorer South American crop prospects sustaining prices. Despite our raised earnings, Sime remains a Hold, with +2% upside. Our new TP is RM9.90 (+16%), based on a rolled-forward 16x CY13 PER (previously RM8.50 on 16x FY13 PER).

Maybank Research 1 March 2012

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