INVESTMENT HIGHLIGHTS

• FY17 Core Net Income is broadly within expectation

• FY17 Core Net Income improved 37% yoy to RM109m

• FFB growth production outlook remains good

• Maintain BUY with Target Price of RM1.90

FY17 Core Net Income is broadly within expectation. TSH Resources (TSH) FY17 core net income (CNI) of RM109m is broadly within expectations at 95% of ours and 93% of consensus earnings estimates, respectively. In our CNI calculation, we have excluded RM15.3m in forex gain, RM5.7m writeoffs and RM4.3m impairments. Final dividend of 2.0 sen was announced and this is within expectation.

FY17 Core Net Income improved 37% yoy to RM109m. This is in line with higher CPO price (+10% yoy to RM2701 per MT) and higher FFB production (+19% yoy to 710,105 MT).

FFB production growth outlook remains good. TSH prospect remains good for FY18 as we expect decent FFB growth of 9%. Plantation division continues to be the main profit driver of the Company with revenue and core net income contribution exceeding 85%. The focus for management in FY18 remains unchanged which is to focus on productivity and efficiency to keep the cost of production at optimal level.

Maintain BUY with Target Price of RM1.90. Our TP is based on unchanged Forward PE of 22.3x (mean valuation). We like TSH due to its strong FY17 CNI growth of 37% yoy and good FFB growth prospect supported by its young age profile of ~7.5 years old.

Source: MIDF Research - 28 Feb 2018