Journey to Wealth
Ta Ann Holdings - FY12 within expectations, to track CPO prices HOLD
- We maintain a HOLD for Ta Ann Holdings, with a downward revised fair value of RM3.40/share (vs. RM3.79/share previously), based on a PE of 13x FY13F ESP of 26 sen (vs. 29 sen previously).
- We have tweaked downwards our FY13-FY14F earnings forecasts by 10%-11%, following the release of Ta Ann's 4QFY12 results yesterday. We have introduced FY15F earnings at RM160mil for a 16% growth.
- It announced an FY12F net profit of RM58.3mil (-62% YoY) - which would have been in-line at 2% above our estimate of RM69.9mil, if not for a RM13.2mil impairment for its Tasmania operations. The core net profit of RM71.5mil is 6% above the consensus estimate of RM67.3mil - meaning operationally, it had performed slightly better than consensus view.
- Ta Ann declared a single-tier interim dividend of 5 sen/share (vs. 20 sen/share FY11) - below our earlier estimate of 10 sen/share.
- The continued impairment for its loss-making operations in Tasmania was not totally a surprise, as we had cautioned about it in our earlier reports. It had also made an impairment of RM9.7mil in the last quarter of FY11.
- It would be prudent on Ta Ann's part to continue doing so in the years ahead. We believe it had made a total investment of nearly RM300mil in its Tasmania operations.
- As expected, the log division's earnings were largely offset by the losses at its manufacturing division, which has been dragged down by the plywood operations.
- After the impairment, the timber operations incurred a pre-tax loss of RM13.7mil vs. a profit of RM50.37mil in FY11. We continue to expect its plywood manufacturing activities to offset profits from the sale of logs.
- For the oil palm division, its FY12 average CPO price at RM2,863/tonne (-13% YoY vs. FY11's RM3,306/tonne) just fell short of our estimate of RM2,900/share, while FFB production totalled 504,000 tonnes (vs. our estimate of 500,000 tonnes).
- We maintain our CPO price assumptions at RM2,800/tonne for FY13F and at RM3,000/tonne for FY14F-FY15F. We maintain our volume assumptions.
- The group's prospects remain largely hinged on its oil palm plantations and the outlook for CPO, with the wild cards being log and plywood prices.
Source: AmeSecurities
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
Don't Miss Out: Up to USD1,000 in Our Lucky Draw!
Apps
Top Articles
1
Good Articles to Share
2
save malaysia!
5
save malaysia!
6
7
BFM Podcast
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....
