Plantation Plantation
Over the hill Over the hill

Improving line efficiency and robust demand for nitrile gloves to support margins. Raised FY14-15F earnings by 1-3%; more upside if margins hold up. Maintaining lead in nitrile gloves and line speed; further improvements possible. Upgrade to BUY with higher RM6.60 TP.

Malaysia’s May13 palm oil stockpile shrank 5% mo-m to 1.816m MT – c.4% below forecast – as output was flatter than normal for the period. May13 palm oil exports fell 3% m-o-m, while implied domestic consumption fell 45% m-o-m. Palm oil stockpile is likely to rise again from here – we no longer expect near-term price recovery. Exit now; any exposure should be limited to AALI and FR.

Source: HwangDBS Research - 11 Jun 2013