RSPO certification for eight mill complexes. Felda Global Ventures Holdings Berhad (FGV) has announced that it has received its Roundtable Sustainable Palm Oil (RSPO) Principles and Criteria (P&C) (“RSPO P&C“) certification for eight mill complexes at the end of 2017. We gather that the eight mill complexes are expected to produce over 200,000 MT of Certified Sustainable Palm Oil (CSPO) and 60,000 MT of Certified Sustainable Palm Kernel Oil (CSPK). Recall that FGV voluntary withdraw from the RSPO certification in May 2016. Looking ahead, the Company plans to secure RSPO certification for another 8 more by end March-2018. By end-2021, FGV plans to certify its 70 palm oil mills complexes to RSPO and The Malaysian Sustainable Palm Oil (MSPO) standard.
Positive on the news in the long term. We are positive on the news as higher volume of CSPO should lead to higher market access in Europe for FGV.
Earnings estimate maintained. However, earnings impact is minimal as we gather that the premium of RSPO oil is small against normal palm oil. Hence, we maintain our FY18 core earnings estimate of RM70m. FY17 core earnings is also maintained at RM54m.
Maintain NEUTRAL with TP of RM1.96. Our TP is based on Price to Book target of 1.23x which reflects +0.5 Standard Deviation.
Source: MIDF Research - 4 Jan 2018
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curious2
TP gain respect if IPO time same not U-turn after 5-6 years.
2018-01-04 09:48