GENP’s 2017 core net profit of RM336.2m (+23.9% yoy) came in within our and consensus 2017 expectations. GENP also declared a special DPS of 11 sen and final DPS of 9.5 sen, bringing 2017 DPS to 26 sen, which was above our expectation of 10 sen. We make no changes to our 2018-19 core EPS forecasts as results were within expectations. Maintain HOLD on GENP with an unchanged TP of RM10.75.

2017 Core Net Profit More Increased by 23.9% Yoy to RM336.2m

Genting Plantations (GENP) reported higher 2017 revenue by 21.9% yoy to RM1.8bn. This was mainly attributable to higher contributions from the upstream plantation and downstream manufacturing divisions, but partially offset by lower property sales. The blended CPO ASP for 2017 was higher yoy at RM2,715/MT (2016: RM2,631/MT) but the PK ASP was slightly lower at RM2,443/MT (2016: RM2,477/MT), while GENP’s FFB production increased by 17% yoy to 1.88m MT. PBT for 2017 increased by 2.8% yoy to RM461.1m. After adjusting for one-off items, 2017 core net profit increased by 23.9% yoy to RM336.2m, accounting for 103.8% and 99.5% of our and consensus 2017 forecasts, respectively - within expectations. GENP declared a special DPS of 11 sen and final DPS of 9.5 sen, bringing 2017 DPS to 26 sen (2016: 21 sen).

Stronger Sequentially

On a sequential basis, GENP’s 4Q17 revenue increased by 23.1% qoq to RM528.4m, due to an increase in contribution across all divisions. PBT for 4Q17 was 31.4% higher qoq on the back of higher FFB production, higher recognition of profit from property projects, improved offtake for the refinery and biodiesel products and net foreign currency translation gains. GENP’s 4Q17 core net profit increased by 30.9% qoq to RM103.5m.

Maintain HOLD With An Unchanged TP at RM10.75

We leave our 2018-19E core EPS forecasts unchanged as there were no major surprises to GENP’s 2017 results and we introduce our 2020E EPS. Our 12-month target price for GENP remains unchanged at RM10.75, based on an unchanged 2018E PER of 22x. Maintain HOLD.

Source: Affin Hwang Research - 27 Feb 2018