Period     1Q13

Actual vs. Expectations   Genting Plantation’s (“GENP”) 1Q13 core net profit of RM81m was within both the consensus and our estimates. It made up 23% of the consensus FY13 full year forecast (RM357m) and 25% of ours (RM327m).

Note that we have excluded the one-off contribution of RM35.0m from the company towards charitable causes and an unrealised forex loss of RM2.0m in arriving at our core net profit.

Dividends    As expected, no dividend was announced.

Key Results Highlights   YoY, the 1Q13 core net profit improved 15% to RM81m. We believe that the strong FFB growth of 32% to 364k mt and a lower fertilizer cost have more than offset the impact of lower CPO prices (which was down 28% to RM2293/mt).

QoQ, the 1Q13 core net profit declined 9% to RM81m due to a seasonally lower FFB production (which slipped 21% to 364k mt).

Outlook    The current low CPO prices may limit the share price upside.

Change to Forecasts      Maintaining our FY13E-FY14E core earnings of RM327m-RM388m.

Rating     Maintain MARKET PERFORM

Despite the limited upside, the strong liquidity in the local market and good earnings growth from its property division should keep the share price downside limited.

Valuation     Maintaining our TP of RM9.00 based on an unchanged Fwd. PER of 17.6x on CY14E EPS of 51.1 sen.

Risks    Worse than expected CPO prices.

Worse than expected sales and profit margin from the property division.

Source: Kenanga