24/08/2012 (The Star) -  Public Invest Research reiterated its Outperform call on QL Resources with a target price of RM3.83 based on QL's proven resilient business model.

It said on Friday the resilience was seen in the first quarter ended June 30, 2012 (Q1,FY13) results where QL was able to sustain top and bottom-line growth despite palm oil activities division declining by a substantial 36%.

“We continue to commend QL for its steady turnover and earnings performance increase on-year which we expect will persevere going forward,” it said.

Public Invest Research said QL Resources' reported RM494.4mil (+8.8% on-year, -0.8% on-quarter), which was 22.1% of its FY13F revenue forecast of RM2.229bil.

Earnings grew to RM31.4mil (up 13.1% on-year, -1.4% on-quarter), 19.7% of FYE13F of RM159.4mil. Growth was due to 30% top-line growth for marine product manufacturing (MPM) and 21% for integrated livestock farming (ILF) segments from the corresponding quarter.

Palm oil activities however dipped in revenue (-36% on-year) due to weaker CPO prices, lower contribution from owned estates and consequently lower FFB production.

Public Invest Research said a decline on-quarter was expected due to seasonality factors.

“In 1QFY13, QL has still managed to sustain its top and bottom-line growth y-o-y despite the underperformance of the Palm oil activities segment based on its resilient business model hence we believe our target price of RM3.83 is still reasonable,” it said.