Journey to Wealth
United Malacca - 1Q13 results broadly in line
Period 1Q13
Actual vs. Expectations
The 1Q13 net profit of RM19.0m made up 19% and 18% each of the consensus' FY13 earnings of RM97.5m and our earnings forecast of RM107.3m.
We deem this to be broadly in line with expectations as 1Q FFB volume is typically lower due to the seasonal factor.
Recall that in FY11, 1Q11 net profit made up only 20% of the full year earnings.
Dividends As expected, no dividend was announced.
Key Results Highlights
YoY, 1Q13 net profit declined 34% to RM19m due to lower CPO prices (-6% YoY), palm kernel prices (-26% YoY) and FFB production (-11% YoY to 71,536mt). FFB production cost has also increased by 27% YoY mainly due to higher fertiliser costs.
QoQ, 1Q13 net profit improved 54% as FFB sales volume improved significantly by 41% to
71,536mt.
Outlook UMCCA's fundamentals remain healthy with a strong FY13-14E FFB growth rate of 19%-3%.
Its long-term outlook remains positive as we believe that UMCCA can sustain a 3-year FFB CAGR growth of 8% as its Sabah estates mature.
Change to Forecasts
Our FY13-14E earnings forecasts of RM107mRM109m remain unchanged.
Our key assumptions are CY12-13E CPO prices of RM3150-RM3100. Adjusted to sync with UMCCA's financial year period, its FY13-14E CPO average selling prices (ASP) are assumed at RM3125-RM3100. We have also assumed FY13-14E FFB productions of 337k-349k.
Rating Maintain OUTPERFORM
UMCCA's net dividend yield of 4.2% is the highest among planters under our coverage.
Its average trees' age profile of 7.6 years old means its strong FFB growth can be sustained.
Valuation Maintaining our TP of RM8.05 based on FY13E PER of 15.3x (+1SD@5-year mean, implying a premium to its peers which only command a +0.5SD for its double digit FFB growth and its above-peer dividend payout of ~60%).
Risks A sustained drop in CPO prices.
Source: Kenanga
Related Stocks
| Chart | Stock Name | Last | Change | Volume |
|---|
Market Buzz
More articles on Journey to Wealth
Ekovest: No plan to launch another offer for Iskandar Waterfront City
Created by kiasutrader | Mar 29, 2018
Kenanga Research - On our Portfolio - Parliament dissolution around the corner?
Created by kiasutrader | Mar 25, 2013
Plantation Sector - Proposed accounting standard scrapped OVERWEIGHT
Created by kiasutrader | Mar 25, 2013
Pavilion Reit - Limited upside, earnings upside have been priced in HOLD
Created by kiasutrader | Mar 25, 2013
Discussions
Be the first to like this. Showing 0 of 0 comments
Post a Comment
Featured Posts
Introducing MY's First IPO Fund for Sophisticated Investors!
New Update. Discover investment communities that resonate with your ideas
M & A Value Partners IPO Equity Fund has been launched - Targeted 13% Return p.a
Latest Videos
Apps
Top Articles
2
3
Koon Yew Yin's Blog
CPO price is rising rapidly as shown by chart below - Koon Yew Yin
4
Axcapital's investment blog
KAB - Executing its way to a record quarter. Could more Petronas contracts be coming?
5
Mercury Securities Research
6
BFM Podcast
7
8
BFM Podcast
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
