INVESTMENT HIGHLIGHTS

• FY17 earnings within expectations

• Cheers from the special dividend

• FY17 earnings improved 24% yoy

• Earnings estimate maintained

• Maintain BUY with higher TP of RM12.70 after rollover of valuation to FY18

FY17 earnings within expectations. Genting Plantations Berhad (GENP) FY17 core net income (CNI) of RM336m was within expectation, meeting 100% and 101% of our and consensus forecasts.

Cheers from the special dividend of 11.0 sen on top of the final dividend of 9.5 sen. The special dividend of 11.0 sen is a positive surprise. Note that the ex-date is on 9-March (payment date: 29-March). Final dividend of 9.5 sen is also announced and we believe that this will be approved by shareholders in the upcoming Annual General Meeting (AGM). Total dividend for FY17 is 26.0 sen and this is 24% higher than FY16 dividend of 21.0 sen.

FY17 core earnings improved 24% yoy. FY17 CNI climbed 24%yoy to RM336m due to higher FFB production (+17%yoy to 1.88m tonnes) and higher CPO price (+3%yoy to RM2715 per tonne).

Earnings estimate maintained. We maintain our FY18 CNI forecast of RM385m. We also introduce our FY19 CNI forecast of RM408m. The 15% core earnings growth expected in FY18 should be supported by good CPO price and strong FFB growth expected at 13%.

Maintain BUY with higher TP of RM12.70. Our TP is based on Sum Of Parts (Refer Page 2). The higher TP is due to rollover of valuation to FY18. We like GENP due to robust 17% FFB growth in FY17. Looking ahead into FY18, we expect its FFB growth to stay strong with 13% FFB growth as we expect another full year contribution from recently acquired estates coupled with 5000 ha of landbank to mature in Indonesia.

Source: MIDF Research - 27 Feb 2018