MARKET DEVELOPMENT
HLIB Research Raises Plantation Companies' Earnings Forecast
HLIB Research Raises Plantation Companies' Earnings Forecast
08/01/2014 (Bernama) - HLIB Research has revised upwards the 2014 and 2015 earnings forecast of plantation companies under its coverage by between 1.1 per cent and 10.1 per cent, given a higher crude palm oil (CPO) price projection.
It raised the 2014 and 2015 CPO price projection by RM100 to RM2,700 per metric tonne, in the face of a slightly better demand outlook due to a more synchronised global economic growth, led by the United States and the Eurozone.
"Locally, the Malaysian government's target to accelerate nationwide the B5 biodiesel implementation by July 2014 and subsequently step it up further to B10, will boost demand for CPO, hence easing stock levels.
"To ensure the viability of B10 biodiesel, the government will provide an annual subsidy of RM413.6 million," it said in a note.
HLIB Research upgraded its call on the sector from "underweight" to "neutral" with a higher target price of between 10.6 per cent and 27.1 per cent.
The research firm's top pick for the plantation sector is CB Industrial Product Holding. It maintained its "buy" call on the stock, with a 10.6 per cent higher target price of RM3.75.
It raised the 2014 and 2015 CPO price projection by RM100 to RM2,700 per metric tonne, in the face of a slightly better demand outlook due to a more synchronised global economic growth, led by the United States and the Eurozone.
"Locally, the Malaysian government's target to accelerate nationwide the B5 biodiesel implementation by July 2014 and subsequently step it up further to B10, will boost demand for CPO, hence easing stock levels.
"To ensure the viability of B10 biodiesel, the government will provide an annual subsidy of RM413.6 million," it said in a note.
HLIB Research upgraded its call on the sector from "underweight" to "neutral" with a higher target price of between 10.6 per cent and 27.1 per cent.
The research firm's top pick for the plantation sector is CB Industrial Product Holding. It maintained its "buy" call on the stock, with a 10.6 per cent higher target price of RM3.75.