• Maintain HOLD (TP: RM6.00). Genting Plantations Bhd (GENP) 9MFY24 core PATAMI of RM196.1mn was in line with our and consensus full year forecast, accounting for 80% and 71% respectively. Both 9MFY24 revenue and core PBT was by lower by 4% and 1% YoY respectively, primarily due to lower sales volume from the Downstream Manufacturing segment. However, this partially mitigated by higher palm product prices (CPO: RM3,722/MT, +6% YoY; PK: RM2,307/MT, +22% YoY) from Plantation segment. Plantation segment margins improved slightly, driven by higher palm product prices, which more than offset the lower FFB production recorded during the period. Maintain a HOLD call with a TP of RM6.00, based on average BV/share of RM6.13 and P/BV of 0.98x.

• Key Highlights. In 3QFY24, GENP’s QoQ revenue declined by 5% to RM718.5mn, largely due to a drop in the Downstream Manufacturing segments revenue to RM239.8mn (-26% QoQ), despite partially mitigate by higher Plantation and Property segment. Nevertheless, core PBT increase by 11% to RM117mn, due to improve in margins from Plantation segment, driven by lower production costs and better Property segment margin.

• Outlook. Moving forward production growth will be supported by Indonesia operations given its favourable age profile and increase harvesting areas, while Malaysia production to be muted. The upstream Plantation segment outlook will be supported by higher CPO prices and stable production. Nevertheless, downstream segment remains challenging given the stiff competition from its Indonesian counterparts following recent changes in Indonesian export levies and overcapacity of refineries in Indonesia.

Source: BIMB Securities Research - 28 Nov 2024