MARKET DEVELOPMENT
CIMB Research Sees Potential Earnings Boost From FGV M&A Plans
CIMB Research Sees Potential Earnings Boost From FGV M&A Plans
19/03/2014 (The Star) - CIMB Equities Research continues to advise investors to hang on to their Felda Global Ventures (FGV) shares and ride on the potential earnings accretion from its M&A plans and the upswing in crude palm oil (CPO) prices.
"The stock is leveraged against rising CPO prices. We estimate that every RM100 per tonne change in CPO price will boost its FY15 EPS by 7%. Its share price is also supported by decent dividend yields and a strong balance sheet," it said on Wednesday.
CIMB Research said during its recent US conference, FGV revealed that its M&A appetite has not waned despite sealing RM3.4bil worth of M&As in 2013.
"In 2014, the group will be working to consolidate and add value to the recently acquired assets as well as scout for potential acquisitions and joint ventures. It expects CPO prices to trade in the range of RM2,600-2,800 per tonne, which is in line with our estimates.
"We maintain our earnings forecasts, SOP-based target price (RM4.72) and Hold rating. The stock is not cheap from a valuation perspective against its peers but we see support for its share price, thanks to its decent dividend yields of 3.6% and strong balance sheet," it said.
"The stock is leveraged against rising CPO prices. We estimate that every RM100 per tonne change in CPO price will boost its FY15 EPS by 7%. Its share price is also supported by decent dividend yields and a strong balance sheet," it said on Wednesday.
CIMB Research said during its recent US conference, FGV revealed that its M&A appetite has not waned despite sealing RM3.4bil worth of M&As in 2013.
"In 2014, the group will be working to consolidate and add value to the recently acquired assets as well as scout for potential acquisitions and joint ventures. It expects CPO prices to trade in the range of RM2,600-2,800 per tonne, which is in line with our estimates.
"We maintain our earnings forecasts, SOP-based target price (RM4.72) and Hold rating. The stock is not cheap from a valuation perspective against its peers but we see support for its share price, thanks to its decent dividend yields of 3.6% and strong balance sheet," it said.