KUALA LUMPUR (March 22): Shares of KUALA LUMPUR KEPONG BHD [] (KLK) were the top gainer in the afternoon session on Thursday as investors were positive to its latest corporate developments including its oil palm land expansion in Indonesia.
At 3.39pm, KLK was up 46 sen to RM23.88. There were 874,500 shares done.
The FBM KLCI rose 2.52 points to 1,585.05. Turnover was 2.37 billion shares valued at RM997.44 million. Losers led gainers 405 to 313 while 347 stocks were unchanged.
The buying was mainly by funds despite some lacklustre outlook from research houses.
RHB Research Institute had trimmed its FY09/12-14 forecasts by 5.2%-6.2%. Post-earnings revision, it lowered its sum-of-parts fair value for KLK to RM24.55 (from RM25.80).It also maintained its market perform recommendation.
The research house said that KLK expected crude palm oil (CPO) production growth to surpass the fresh fruit bunches (FFB) production growth while it also gad a contrarion bearish view of CPO price.
KLK also expected production costs to rise by 5% and 10% in FY12, it added. Other factors were that Indonesia’s export tax structure and global debt crisis affecting KLK’s downstream operations.
RHB Research said the downstream expansion in Indonesia would take care of margin imbalances and to integrate operations further. The research house also removed the retail division from projections.
“As 55% of its PLANTATION [] landbank is in Indonesia, KLK intends to integrate its operations further by expanding downstream into Indonesia. We are positive on these plans as this move would also help KLK address the margin imbalance in Malaysia caused by the Indonesian export tax structure.
At 3.39pm, KLK was up 46 sen to RM23.88. There were 874,500 shares done.
The FBM KLCI rose 2.52 points to 1,585.05. Turnover was 2.37 billion shares valued at RM997.44 million. Losers led gainers 405 to 313 while 347 stocks were unchanged.
The buying was mainly by funds despite some lacklustre outlook from research houses.
RHB Research Institute had trimmed its FY09/12-14 forecasts by 5.2%-6.2%. Post-earnings revision, it lowered its sum-of-parts fair value for KLK to RM24.55 (from RM25.80).It also maintained its market perform recommendation.
The research house said that KLK expected crude palm oil (CPO) production growth to surpass the fresh fruit bunches (FFB) production growth while it also gad a contrarion bearish view of CPO price.
KLK also expected production costs to rise by 5% and 10% in FY12, it added. Other factors were that Indonesia’s export tax structure and global debt crisis affecting KLK’s downstream operations.
RHB Research said the downstream expansion in Indonesia would take care of margin imbalances and to integrate operations further. The research house also removed the retail division from projections.
“As 55% of its PLANTATION [] landbank is in Indonesia, KLK intends to integrate its operations further by expanding downstream into Indonesia. We are positive on these plans as this move would also help KLK address the margin imbalance in Malaysia caused by the Indonesian export tax structure.
