BIMB SECURITIES RESEARCH

MARKET INSIGHT
PP16795/03/2013(031743)

Wednesday, 30 May, 2012

Result Review

Genting Plantations
Below
Stock Data
Bloomberg Ticker GENP MK Market Cap (RM'mn) 6,830 Issued shares (mn) 759 52-week high 9.84 52-week low 6.52 3-mth avg daily volume ('00) 8,465 Free Float 31.43 Shariah Compliant Y Altman Z-score 7.38 YTD price chg 5.18 YTD KLCI chg 2.26 Beta 0.87 Major Shareholders Genting Bhd 53.63% EPF 14.75% Vanguard Group 1.23% 1mth (4.15) (4.00) 2011 1,372.4 1,336.5 577.4 601.3 442.0 58.25 16.25 1.81 4.02 15.45 43.20% 44.99% 26.38% 13.96% 11.59% N. Cash 14.59% 35.19% 35.97% 36.75% 36.34% 2012E 1,346.6 1,330.8 546.1 568.1 421.8 55.59 16.50 1.83 4.41 16.19 41.04% 42.69% 25.00% 12.26% 9.84% N. Cash -1.88% -0.43% -5.42% -5.53% -4.57% 3mth (2.57) (2.47) 2013E 1,506.2 1,407.7 600.7 616.4 457.7 60.31 17.50 1.94 4.83 14.92 42.67% 43.78% 25.00% 12.39% 9.80% N. Cash 11.85% 5.78% 9.99% 8.50% 8.50% 12mth 14.75 11.87 2014E 1,633.8 1,450.2 610.9 623.9 463.3 61.05 18.00 2.00 5.27 14.74 42.12% 43.02% 25.00% 11.53% 9.13% N. Cash 8.47% 3.01% 1.70% 1.22% 1.22%

Neutral
Price: RM9.00 Target Price: (+5.6%)RM9.50
Genting Plantations revenue of RM272.7m is a marginal increase of 0.6% y-o-y, thanks largely to favourable property sales. Despite with relatively flat revenue, net profit plunged more than 16.0% to RM78.8m mainly due to lower palm products selling prices and higher operation costs in the Plantation segment. As compared to previous quarter, net profit margins improved by 2.5pp to 28.9%. Due to the slow margin recovery we are fine tuning our earnings forecast lower by 4.1% and 2.7% for FY12 and FY13 respectively. Maintain target price at RM9.50. Neutral. Revenue flat, profits declined. Genting Plantations 1QFY12 revenue of RM272.7m is a 0.6% increase y-o-y, thanks to higher sales from property division. Despite the flattish topline growth, net profit dropped 16.5% to RM78.8m as compared to RM94.3m achieved in 1QFY11. The adverse result was mainly due to lower palm products average selling prices and higher operation expenditure in the Plantation segment. 1QFY11 267.4 3,682.0 3,038.0 1QFY12 Change 275.1 2.9% 3,179.0 -13.7% 1,941.0 -36.1%

Slow margin recovery

Share Performance (%)

Absolute vs. KLCI

Financial Highlights
FYE 31 Dec FFB Prod. ('000 mt) Turnover EBIT Pretax profit Net Profit EPS (sen) Gross DPS (sen) Div Yield (%) NTA/share (RM) PE Ratio EBIT Margin Pretax Margin Effective tax rate ROE ROA Net Gearing (x) 2010 1,197.7 988.6 424.7 439.7 324.2 42.76 12.50 1.39 3.53 21.05 42.96% 44.48% 26.27% 11.59% 10.15% N. Cash 3.39% 30.84% 45.66% 45.64% 37.57%

FFB prod. (000mt) CPO Price (RM/mt) PKO Price (RM/mt)

Growth Ratios
FFB Turnover EBIT Pretax profit Net profit

Recovery in margin. Despite the lower profit, we note that profit margin has improved as compared to the previous quarter. In comparison, EBIT margin rose 4.4 percentage points to 38.4%, whilst net margin improved 2.5 percentage points to 28.9%. Despite the improvement, the recovery was below expectation. Forecast. The Groups sales performance was largely within expectation, but profit margins were below despite the improvement. Hence, we have fine tuned downward our earnings estimates by 4.1% and 2.7% for FY12 and FY13 respectively. View & Valuation. Despite the lower earnings estimates for FY12 and FY13, we maintain its target price at RM9.50 after rolling over to the next 12 months EPS of 58.0 sen and applying a 3-year average P/E ratio of 16.4x. Maintain neutral.

Share Price Chart

10.3 9.8 9.3 8.8 8.3 7.8 7.3 6.8 6.3 Jul-11

Nov-11

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Ng Keat Yung nkyung@bimbsec.com.my 03-26918887 ext 181

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30 May 2012

Result Review: Genting Plantations 1QFY12

Quarterly figures
FYE 31 Dec (RM'm) Revenue EBIT Pretax profit Taxation Minority interest Net Profit EPS (sen) Net gearing (x) EBIT margin (%) PBT margin (%) Net margin (%) Effective tax rate (%) Mar-11 271.1 132.3 132.1 -37.3 -0.5 94.3 12.43 N. Cash 48.80 48.72 34.79 28.22 Jun-11 364.4 191.0 190.9 -49.8 -1.2 139.9 18.44 N. Cash 52.41 52.40 38.39 26.09 Sep-11 344.5 151.5 150.7 -37.5 0.5 113.8 14.99 N. Cash 43.98 43.75 33.02 24.86 Dec-11 356.5 121.1 127.6 -34.1 0.5 94.0 12.39 N. Cash 33.96 35.80 26.38 26.73 Mar-12 QoQ Chg 272.7 -23.5 104.7 -13.5 104.0 -18.5 -26.7 -21.7 1.5 179.4 78.8 -16.2 10.38 -16.2 N. Cash N/A 38.40 13.1 38.15 6.6 28.90 9.5 25.69 -3.9 YoY Chg 0.6 -20.9 -21.3 -28.3 -411.8 -16.5 -16.5 N/A -21.3 -21.7 -16.9 -9.0

Source: BIMB Securities

Income Statement
FYE 31 Dec (RM'm) Revenue EBITDA Pretax profit Tax MI Net profit Net profit growth (%) EPS (sen) EPS growth (%) Gross DPS (sen) Dividend yield (%) NTA/share (RM) Net gearing (x) PER (x) P / NTA (x) ROE (%) ROA (%) 2009 755.6 305.2 301.9 (64.0) (2.3) 235.7 -36.9 31.1 -36.9 9.0 1.00 2.78 N. Cash 28.92 3.24 9.44 8.68 2010 988.6 448.6 439.7 (115.5) 0.0 324.2 37.6 42.8 37.4 12.5 1.39 3.53 N. Cash 21.05 2.55 11.59 10.15 2011 1,336.5 617.4 601.3 (158.7) (0.6) 442.0 36.3 58.3 36.2 16.3 1.81 4.02 N. Cash 15.45 2.24 13.96 11.59 2012E 1,330.8 591.5 568.1 (142.0) (4.3) 421.8 -4.6 55.6 -4.6 16.5 1.83 4.41 N. Cash 16.19 2.04 12.26 9.84 2013E 1,407.7 652.8 616.4 (154.1) (4.6) 457.7 8.5 60.3 8.5 17.5 1.94 4.83 N. Cash 14.92 1.86 12.39 9.80 2014E 1,450.2 669.7 623.9 (156.0) (4.7) 463.3 1.2 61.0 1.2 18.0 2.00 5.27 N. Cash 14.74 1.71 11.53 9.13

Source: BIMB Securities

Balance Sheet
FYE 31 Dec (RM'm) Current assets Non-current assets Total Assets Current liabilities Non-current liabilities Shareholders' fund Minority interest Equity & liabilities 2009 889.1 1,978.4 2,867.6 133.3 119.1 2,548.1 67.1 2,867.6 2010 1,108.8 2,413.1 3,522.0 201.5 340.9 2,868.7 110.9 3,522.0 2011 1,406.9 2,699.0 4,105.9 231.0 523.0 3,234.2 117.6 4,105.9 2012E 1,459.1 3,005.0 4,464.1 149.8 662.8 3,530.9 120.6 4,464.1 2013E 1,544.8 3,331.5 4,876.3 145.0 751.6 3,855.7 123.9 4,876.3 2014E 1,609.5 3,665.6 5,275.1 157.9 807.6 4,182.4 127.2 5,275.1

Source: BIMB Securities

www.bimbsec.com.my

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30 May 2012
DEFINITION OF RATINGS BIMB Securities uses the following rating system:

Result Review: Genting Plantations 1QFY12

STOCK RECOMMENDATION BUY Total return (price appreciation plus dividend yield) is expected to exceed 10% in the next 12 months OUTPERFORM The stock is expected to perform ahead of the market in the next 12 months TRADING BUY The stock is expected to outperform the market in the next 3 months NEUTRAL The stock is expected to perform in line with the market in the next 12 months TRADING SELL The stock is expected to underperform the market in the next 3 months SELL An expected price depreciation of more than 10% in the next 12 months SECTOR RECOMMENDATION OVERWEIGHT The Industry as defined by the analysts coverage universe, is expected to outperform the relevant primary market index over the next 12 months NEUTRAL The Industry as defined by the analysts coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months UNDERWEIGHT The Industry as defined by the analysts coverage universe, is expected to underperform the relevant primary market index over the next 12 months Applicability of ratings The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies. Disclaimer The investments discussed or recommended in this report not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of BIMB Securities SdnBhd may from time to time have a position in or either the securities mentioned herein. Members of the BIMB Group and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgements as of this and are subject to change without notice. BIMB Securities SdnBhd accepts no liability for any direct, indirect or consequential loss arising from use of this report.

Published by

BIMB SECURITIES SDN BHD (290163-X) A Participating Organisation of Bursa Malaysia Securities Berhad Level 32, Menara Multi Purpose, Capital Square, No. 8 Jalan Munshi Abdullah, 50100 Kuala Lumpur Tel: 03-2691 8887, Fax: 03-2691 1262 http://www.bimbsec.com.my

Kenny Yee Head of Research

www.bimbsec.com.my

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