KUALA LUMPUR (Dec 2): MIDF Research has maintained a “buy” recommendation on FGV Holdings Bhd with an unchanged target price (TP) of RM2.20 per share, in anticipation that the favourable crude palm oil (CPO) price will continue to generate better financial performance for the group.

On top of that, the expected higher average selling price (ASP) of refined sugar and increase in sales volume should be able to help MSM achieve a higher profit margin in the coming quarters, it said in a research note on Thursday. 

"Our TP implies expected total return of 52.66%," it said. 

In the fourth quarter of the financial year 2021 (4QFY21), the research firm expects that there will be some decline in fresh fruit bunches (FFB) production level due to unfavourable weather, coupled with a stagnant number of workers. 

Meanwhile, it noted that the group is planning to hire 7,000 foreign workers (part of the intake of 32,000 workers granted by the government), expected to join FGV in 1QFY22.

FGV is also in the midst of improving its recruitment process by setting up a one-stop centre at the sourcing countries to ease the evaluation process.

The group is particular about choosing credible agents to make sure that none of the agents is benefitting from the recruitment fees.

On the 11 International Labour Organisation (ILO) forced labour indicators assessment, the research house said the audit process is expected to complete in calendar year 2022 (CY22) as the validation process will take about six months.

As at 10.10am, the share price of FGV was one sen better at RM1.47, with 30,400 shares transacted. 

Calvin comments:

At long last MIDF has come out bravely to RERATE FGV AT RM2.20

And by Proxy All other Palm Oil Shares should be rerated Up as Well

WELL DONE MIDF

WELL DONE FGV