Plantation Companies
Low yields, better exports

Malaysia’s Sep13 stockpile of 1.784m MT was slightly below forecast; as yield recovery was slower than expected, amid robust exports. Expect Oct13 exports to slow down post-Divali, while output seasonally peaks. Planters are due to report sequential earnings recovery. Top picks: AALI, IOI, TSH, BAL, FR, IFAR. Risks to our call: Reversal of USD strength, hike in Indian import tariffs on refined oils, crude oil price volatility, higher-than-forecast wage hikes.

UMW Oil & Gas Corporation Bhd
Retail Price: RM2.80; UMWOG MK
Initial Public Offering – Main Market

.Established Malaysian O&G service player. Explosive growth from jack-up rig business. IPO proceeds to expand asset base and fuel growth. TP of RM3.20 implies 22x FY14 PE. Subscribe for 14% potential return.

Source: HwangDBS Research - 11 Oct 2013