Wednesday, 25 April 2012

MIDF Research downgrades TH Plantation to Trading Sell, cuts TP to RM2.12

KUALA LUMPUR (April 25): MIDF Research has downgraded TH PLANTATION []s Bhd to Trading Sell from Neutral and cut its target price to RM2.12 from RM3 previously following its earnings revision for the company.

In note Wednesday, MIDF Research however said it was applying a higher target PER in order to reflect TH Plant’s stable and mature profile.

The research house said its new target price of RM2.12 was derived from 13.0x EPS12 which was one standard deviation above its 3-year historical average of 10.8x (which is our previous valuation).

“We believe that the positive news flow of its future expansion has been priced in and the weak 1Q12 numbers would dampen investors’ sentiment and be an excuse for investors to take profit. At current price TH Plant is pricey, trading at 17.2x forward PER.

“We expect TH Plantation to come under selling pressure in the short term and hence downgrade it to Trading Sell,” it said.

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