INVESTMENT HIGHLIGHTS

• 1QFY18 earnings within expectations

• Strong FFB growth limits the core earnings decline yoy

• Earnings estimate maintained

• Maintain BUY with TP of RM12.00

1QFY18 core earnings within expectations. Genting Plantations Berhad (GENP) 1QFY18 core net income (CNI) of RM73.2m was within expectation, meeting 21% and 20% of ours and consensus forecasts. In our CNI calculation, we exclude RM14.4m net surplus arising from Government acquisition of land and RM13.8m of forex gain. As expected, no dividend was announced.

Strong FFB growth limits the core earnings decline to 2% yoy. 1QFY18 CNI is marginally lower by 2%yoy to RM73.2m as strong FFB production (+20%yoy to 485,510 tonnes) limits the impact from lower CPO price (-22%yoy to RM2375 per tonne).

Earnings estimate maintained. We maintain our FY18 CNI forecast of RM346m. We also maintain our FY19 CNI forecast of RM379m.

Maintain BUY with TP of RM12.00. Our TP is based on Sum Of Parts (Refer Page 2). We like the Company as we expect its FFB growth of 13% yoy to be the strongest among planters under our coverage. This is due to new contribution from recently acquired estate of 12,893 ha and 5000 ha coming to maturity in Indonesia.

Source: MIDF Research - 24 May 2018