Journey to Wealth
IOI Corporation - Recovery in manufacturing HOLD
- We are maintaining our HOLD recommendation on IOI Corporation, with an unchanged RNAV-based fair value of RM5.15/share.
- IOI's 1HFY13 core net profit was within our expectations and consensus estimates. In spite of this, we have raised IOI's earnings forecast by 5% to account for the lowerthan-expected effective tax rate and strong recovery in manufacturing earnings.
- Comparing 1HFY13 against 1HFY12, IOI's core net profit declined 14% to about RM884.4mil due to lower CPO prices.
- The small 2.8% YoY increase in IOI's FFB production in 1HFY13 was not enough to offset the impact of the fall in selling prices.
- The group realised an average CPO price of RM2,585/tonne in 1HFY13, 16.5% weaker than the average of RM3,094/tonne recorded in 1HFY12.
- On a quarterly basis, IOI's plantation profit slid 25.3% to RM281.7mil in 2QFY13.
- Average CPO price realised shrank 22.1% from RM2,941/tonne in 1QFY13 to RM2,292/tonne in 2QFY13. FFB output expanded 16% QoQ to 1.0mil tonnes in 2QFY13.
- IOI's average CPO price of RM2,292/tonne in 2QFY13 was 5.6% higher than MPOB's (Malaysian Palm Oil Board) spot price of RM2,170/tonne.
- Manufacturing EBIT recovered 67.9% YoY to RM231.9mil in 1HFY13. EBIT margin of the division inched up from 1.8% in 1HFY12 to 3.7% in 1HFY13.
- EBIT of the property development division declined 3.8% YoY to RM224mil in 1HFY13. Share of profits in jointly- controlled entities, which undertake property projects in Singapore, strengthened from RM16.3mil in 1HFY12 to RM28.3mil in 1HFY13.
- In spite of the YoY earnings enhancement in 1HFY13, we reckon that the Singapore government's recent measures to cool down the property sector would have an impact on IOI's high-end projects in Sentosa Cove.
- These measures include an increase in the additional buyer's stamp duty (ABSD) and imposition of the ABSD on permanent residents buying their first properties in Singapore.
Source: AmeSecurities
Related Stocks
| Chart | Stock Name | Last | Change | Volume |
|---|
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
MQ Trading Signals
Time
Signal
Duration
Type
2024-05-17 15:00:00
EMA 5
Hourly
SELL
2024-05-17 15:00:00
TURTLE SYSTEM 20
Hourly
SELL
2024-05-17 14:30:00
EMA 5
30 Mins
SELL
2024-05-17 14:30:00
MACD/RSI
10 Mins
SELL
2024-05-17 12:35:00
EMA 5
5 Mins
BUY
Apps
Top Articles
1
CEO Morning Brief
2
save malaysia!
Malaysia set to become hub for AI development and innovation
4
THE INVESTMENT APPROACH OF CALVIN TAN
5
6
8
#
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....
