KUALA LUMPUR (Feb 17): RHB Research is maintaining its outperform call on TH PLANTATION []s while it raised the fair value to RM3.15 from RM3.
It said on Friday that TH Plantations was joining the ranks of the mid-cap plantation stocks.
RHB Research highlighted four key points: 1) Strong FFB production growth for FY11 achieved; 2) Production costs to rise in FY12, on higher labour and fertiliser costs; and 3) Work has started on TH Plantations’ new land acquisitions already; and 4) More acquisitions in 2012?
“With TH Plantations’ recent land acquisition of 19,782ha, bringing total landbank to 58,895ha, it has achieved its KPI target of growing its landbank to 50,000ha by end-2011.
“We believe TH Plantations’ next stage of expansion could come from some of Lembaga Tabung Haji’s landbank that THP is currently managing. We highlight, however, that we would only be positive on any acquisitions provided the earnings accretion from the new landbank is greater than the potential dilutive effect of new shares issued,” the research house said.
It said on Friday that TH Plantations was joining the ranks of the mid-cap plantation stocks.
RHB Research highlighted four key points: 1) Strong FFB production growth for FY11 achieved; 2) Production costs to rise in FY12, on higher labour and fertiliser costs; and 3) Work has started on TH Plantations’ new land acquisitions already; and 4) More acquisitions in 2012?
“With TH Plantations’ recent land acquisition of 19,782ha, bringing total landbank to 58,895ha, it has achieved its KPI target of growing its landbank to 50,000ha by end-2011.
“We believe TH Plantations’ next stage of expansion could come from some of Lembaga Tabung Haji’s landbank that THP is currently managing. We highlight, however, that we would only be positive on any acquisitions provided the earnings accretion from the new landbank is greater than the potential dilutive effect of new shares issued,” the research house said.
