Journey to Wealth

TSH Resources - Better than expected FY12

kiasutrader
Publish date: Wed, 27 Feb 2013, 09:42 AM
kiasutrader
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Period  4Q12/FY12

Actual vs. Expectations  FY12 core net profit* of RM90m makes up 139% of consensus forecast (RM65m) and this is above consensus expectation. It is also better than our expectation at 131% of our forecast of RM69m.

 Delayed FFB yield recovery in Sabah and Kalimantan has caused 4Q12 FFB volume to be exceptionally high. In addition, TSH refineries JV registered better than expected PBT of RM11m in 4Q12 (against 9M12 PBT of only RM9m).

Dividends  As expected, single tier dividend of 2.5 sen was announced.

Key Results Highlights  YoY, FY12 core net profit declined 21% to RM90m as CPO prices was down 9% to RM2749/mt. Better FFB volume at 425k mt (+6%) mitigated the eanings decline.

 QoQ, 4Q12 core net profit jumped 80% to RM35m as FFB volume surged 37% to 140,828 mt while refineries margin improved. These has more than enough to counter CPO prices of RM2170/mt (-24% QoQ) based on MPOB data.

Outlook  Despite the better than expected FY12 results, the current low CPO prices should keep share price upside limited.

 Our FY13E earnings estimate remains unchanged as we already assume FFB volume to grow by 31% YoY to 558k mt.

Change to Forecasts  Maintain FY13E-FY14E earnings of RM104mRM160m. Key assumptions are FY13E-FY14E CPO price of RM2500-RM2700 per mt.

Rating   Maintain MARKET PERFORM

Valuation  Maintain our TP to RM2.00 based on an unchanged Fwd. PER of 16.3x to the CY13E EPS of 12.3 sen.

Risks  Worse than expected CPO prices.

Source: Kenanga
TSH (9059)
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