KUALA LUMPUR (Nov 23): Credit Suisse has maintained its Outperform rating on TA ANN HOLDINGS BHD [] at RM4.78 and upped its target price for the stock to RM7.30 (from RM6.96), and said it was raising Ta Ann’s net profit for FY11-12E by 25-38% to reflect stronger-than-expected oil palm PLANTATION [] contributions.
In a note Wednesday, Credit Suisse said that there was still no clarity in terms of the timing of Japanese reCONSTRUCTION [].
Timber companies are now looking towards Mar/Apr 2012 for reconstruction activity to commence while the most bearish are concerned that 2012 could be worse than 2011, it said.
“We expect plywood prices to remain on a downtrend for the rest of 2011, as the surge in Japanese plywood imports has so far not been matched by any reconstruction demand.
“We expect log prices to remain firm, as we go into the rainy season which could potentially crimp log supply through early 2012.
Credit Suisse said as and when reconstruction activity kicks off in Japan, this would likely be positive for plywood prices and act as a positive catalyst for Ta Ann.
“The risks to our call include any potential delay in reconstruction activity in Japan or a strong ringgit,” it said.
In a note Wednesday, Credit Suisse said that there was still no clarity in terms of the timing of Japanese reCONSTRUCTION [].
Timber companies are now looking towards Mar/Apr 2012 for reconstruction activity to commence while the most bearish are concerned that 2012 could be worse than 2011, it said.
“We expect plywood prices to remain on a downtrend for the rest of 2011, as the surge in Japanese plywood imports has so far not been matched by any reconstruction demand.
“We expect log prices to remain firm, as we go into the rainy season which could potentially crimp log supply through early 2012.
Credit Suisse said as and when reconstruction activity kicks off in Japan, this would likely be positive for plywood prices and act as a positive catalyst for Ta Ann.
“The risks to our call include any potential delay in reconstruction activity in Japan or a strong ringgit,” it said.
