INVESTMENT HIGHLIGHTS

• Denied restructuring and takeover rumours

• Neutral on the news

• Earnings estimate maintained

• Maintain NEUTRAL with TP of RM1.75

Denied restructuring and takeover rumours. According to The Edge Financial Daily, Felda Global Ventures (FGV) has denied talk that it will be announcing a large scale restructuring or be taken over before the General Election on 9 May. This is in response to International Palm Oil Monitor (IPOM) report on 30 April which suggested such move.

Neutral on the news. As we did not factor restructuring or takeover previously, the news is not expected to have significant impact on share price. We believe that the key share price driver for the company is its core earnings.

Earnings estimate maintained. We maintain our FY18 core earnings estimate of RM106m. We also maintain our FY19 core earnings estimate of RM117m. The news is not expected to have impact on earnings.

Maintain Neutral with TP of RM1.75. Our TP is based on 1.1x Price To Book Valuation (Mean Valuation). We do not foresee significant downside to share price as the Company has been registering core net profit in the past two quarters suggesting more sustainable earnings trend. The next key event to watch will be the 1QFY18 earnings which will be released before end of May.

Source: MIDF Research - 4 May 2018