Stock Name: Global Palm
Company Name: GLOBAL PALM RESOURCES HLGS LTD
29 November 2011 : Global Palm Resources
Summary: Global Palm Resources (GPR) continues to disappoint with the pace of its new planting in 3Q11, where it added just 176 ha, bringing its YTD increase to 621 ha. Even though GPR has slashed its new planting target from 1.6-1.7k ha this year to 1k ha, it could still be a tall order as GPR would need to achieve 379 ha of new plantings in 4Q11. Management explained that the slowdown in new planting is an industry-wide trend, arising from Indonesia's two-year moratorium on new permits to clear primary forests and greater public and NGO scrutiny over new land opening. GPR has also lowered its new planting target for 2012 to just 770 ha. In view of the slow expansion so far and also the muted new planting target next year, we have reduced our FY12 revenue forecast by 9.3% and earnings by 8.4%. Applying an unchanged valuation of 10x against its FY12F EPS, versus blended FY11/FY12F EPS previously, our fair value drops to S$0.195 from S$0.21. Maintain HOLD.
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Please visit www.iocbc.comand click on 'Research' option at the top bar of the homepage.
Company Name: GLOBAL PALM RESOURCES HLGS LTD
| Research House: OCBC | Price Call: HOLD | Target Price: 0.195 |
29 November 2011 : Global Palm Resources
Summary: Global Palm Resources (GPR) continues to disappoint with the pace of its new planting in 3Q11, where it added just 176 ha, bringing its YTD increase to 621 ha. Even though GPR has slashed its new planting target from 1.6-1.7k ha this year to 1k ha, it could still be a tall order as GPR would need to achieve 379 ha of new plantings in 4Q11. Management explained that the slowdown in new planting is an industry-wide trend, arising from Indonesia's two-year moratorium on new permits to clear primary forests and greater public and NGO scrutiny over new land opening. GPR has also lowered its new planting target for 2012 to just 770 ha. In view of the slow expansion so far and also the muted new planting target next year, we have reduced our FY12 revenue forecast by 9.3% and earnings by 8.4%. Applying an unchanged valuation of 10x against its FY12F EPS, versus blended FY11/FY12F EPS previously, our fair value drops to S$0.195 from S$0.21. Maintain HOLD.
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Please visit www.iocbc.comand click on 'Research' option at the top bar of the homepage.
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