Thursday, 5 April 2012

Maybank IB starts coverage on Ta Ann with Buy call, target price RM8

KUALA LUMPUR (April 5): Maybank Investment Bank Bhd Research has initiated coverage on TA ANN HOLDINGS BHD [] at RM6.20 with a Buy Rating and target price of RM8, and said three key catalysts will propel earnings for the company, namely: (i) an explosive 18% 3-year forward CAGR in FFB output, (ii) Japan‟s reCONSTRUCTION [], (iii) a maiden contribution from its forest PLANTATION [] in 2015.

In a note Thursday, the research house said Ta Ann‟s earnings quality was boosted by its transformation into a producer of palm oil, which contributed 77% of PBT in 2011.

“The stock trades at 11.7x 2013 PER, with low EV/planted ha of about RM39,600, and is poised to deliver an 11% 3-year net profit CAGR. We initiate coverage with a Buy and RM8.00 TP on 15x 2013 PER (+29% upside),” it said.

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