HAPSENG (3034) - Hap Seng Plantations - A decent 4Q harvest
Target RM2.64 (Stock Rating: HOLD)
The FY14 net profit of Hap Seng Plantations (HSP) was broadly in line, though 2% below our forecast but 4% above consensus. The weaker result against our forecast was due to lower FFB output. The group declared a final dividend of 5 sen, bringing the full-year dividend to 11 sen. This is 1 sen higher than our forecast. We lower our FY15-16 net profit forecasts by 3-7% to reflect lower selling prices achieved in Sabah. However, our target price rises to RM2.64 as we remove the 10% discount attached to its historical average 13.5x P/E, to reflect the higher dividend payout. We maintain our Hold rating as we see share price support from its decent dividend yield and cheap assets.
Key results highlights
4Q net profit decline 9% yoy to RM36m due to lower selling prices achieved for its palm products and weaker FFB production. On a qoq basis, 4Q net profit grew 53% due to higher FFB output and lower manuring costs. For the full year, net profit improved by 32% yoy due mainly to higher production and better selling prices achieved for its palm kernel products. The average PK selling price achieved was 28% higher at RM1,654 per tonne, while full-year FFB output grew 3% due to higher FFB yields. The group’s operating costs grew by only 5%, reflecting manageable replanting costs.
Key surprises
FFB output for the full year was 2% below our projection due to weaker 4Q yields from its estates. The average CPO price achieved of RM2,385 per tonne in 2014 was slightly ahead of MPOB’s average of RM2,383 per tonne as the group received premium pricing for some of its certified palm oil products. We noticed that the selling price discount between CPO for the Sabah region and Southern region of Malaysia has widened to RM60-70 per tonne over the past two months from RM10-20 per tonne a year ago. In view of this, we have lowered our CPO price assumptions for HSP as all of its estates are in Sabah, leading to a 3-7% cut in our net profit projections for FY15-16.
Supported by attractive dividends and assets
We continue to recommend that investors Hold the stock in view of its attractive dividend yields, strong net cash position and undervalued plantation assets. At the current share price, the implied EV/ha for its estates is only RM53,851, below the recent transacted price of RM70k-80k per ha for estates.
Source: CIMB Daybreak - 24 February 2015 0 Hap Seng Plantations - A decent 4Q harvest
Target RM2.64 (Stock Rating: HOLD)
The FY14 net profit of Hap Seng Plantations (HSP) was broadly in line, though 2% below our forecast but 4% above consensus. The weaker result against our forecast was due to lower FFB output. The group declared a final dividend of 5 sen, bringing the full-year dividend to 11 sen. This is 1 sen higher than our forecast. We lower our FY15-16 net profit forecasts by 3-7% to reflect lower selling prices achieved in Sabah. However, our target price rises to RM2.64 as we remove the 10% discount attached to its historical average 13.5x P/E, to reflect the higher dividend payout. We maintain our Hold rating as we see share price support from its decent dividend yield and cheap assets.
Key results highlights
4Q net profit decline 9% yoy to RM36m due to lower selling prices achieved for its palm products and weaker FFB production. On a qoq basis, 4Q net profit grew 53% due to higher FFB output and lower manuring costs. For the full year, net profit improved by 32% yoy due mainly to higher production and better selling prices achieved for its palm kernel products. The average PK selling price achieved was 28% higher at RM1,654 per tonne, while full-year FFB output grew 3% due to higher FFB yields. The group’s operating costs grew by only 5%, reflecting manageable replanting costs.
Key surprises
FFB output for the full year was 2% below our projection due to weaker 4Q yields from its estates. The average CPO price achieved of RM2,385 per tonne in 2014 was slightly ahead of MPOB’s average of RM2,383 per tonne as the group received premium pricing for some of its certified palm oil products. We noticed that the selling price discount between CPO for the Sabah region and Southern region of Malaysia has widened to RM60-70 per tonne over the past two months from RM10-20 per tonne a year ago. In view of this, we have lowered our CPO price assumptions for HSP as all of its estates are in Sabah, leading to a 3-7% cut in our net profit projections for FY15-16.
Supported by attractive dividends and assets
We continue to recommend that investors Hold the stock in view of its attractive dividend yields, strong net cash position and undervalued plantation assets. At the current share price, the implied EV/ha for its estates is only RM53,851, below the recent transacted price of RM70k-80k per ha for estates.
Source: CIMB Daybreak - 24 February 2015
http://cimbresearchklse.blogspot.com/2015/02/hap-seng-plantations-decent-4q-harvest.html
Target RM2.64 (Stock Rating: HOLD)
The FY14 net profit of Hap Seng Plantations (HSP) was broadly in line, though 2% below our forecast but 4% above consensus. The weaker result against our forecast was due to lower FFB output. The group declared a final dividend of 5 sen, bringing the full-year dividend to 11 sen. This is 1 sen higher than our forecast. We lower our FY15-16 net profit forecasts by 3-7% to reflect lower selling prices achieved in Sabah. However, our target price rises to RM2.64 as we remove the 10% discount attached to its historical average 13.5x P/E, to reflect the higher dividend payout. We maintain our Hold rating as we see share price support from its decent dividend yield and cheap assets.
Key results highlights
4Q net profit decline 9% yoy to RM36m due to lower selling prices achieved for its palm products and weaker FFB production. On a qoq basis, 4Q net profit grew 53% due to higher FFB output and lower manuring costs. For the full year, net profit improved by 32% yoy due mainly to higher production and better selling prices achieved for its palm kernel products. The average PK selling price achieved was 28% higher at RM1,654 per tonne, while full-year FFB output grew 3% due to higher FFB yields. The group’s operating costs grew by only 5%, reflecting manageable replanting costs.
Key surprises
FFB output for the full year was 2% below our projection due to weaker 4Q yields from its estates. The average CPO price achieved of RM2,385 per tonne in 2014 was slightly ahead of MPOB’s average of RM2,383 per tonne as the group received premium pricing for some of its certified palm oil products. We noticed that the selling price discount between CPO for the Sabah region and Southern region of Malaysia has widened to RM60-70 per tonne over the past two months from RM10-20 per tonne a year ago. In view of this, we have lowered our CPO price assumptions for HSP as all of its estates are in Sabah, leading to a 3-7% cut in our net profit projections for FY15-16.
Supported by attractive dividends and assets
We continue to recommend that investors Hold the stock in view of its attractive dividend yields, strong net cash position and undervalued plantation assets. At the current share price, the implied EV/ha for its estates is only RM53,851, below the recent transacted price of RM70k-80k per ha for estates.
Source: CIMB Daybreak - 24 February 2015 0 Hap Seng Plantations - A decent 4Q harvest
Target RM2.64 (Stock Rating: HOLD)
The FY14 net profit of Hap Seng Plantations (HSP) was broadly in line, though 2% below our forecast but 4% above consensus. The weaker result against our forecast was due to lower FFB output. The group declared a final dividend of 5 sen, bringing the full-year dividend to 11 sen. This is 1 sen higher than our forecast. We lower our FY15-16 net profit forecasts by 3-7% to reflect lower selling prices achieved in Sabah. However, our target price rises to RM2.64 as we remove the 10% discount attached to its historical average 13.5x P/E, to reflect the higher dividend payout. We maintain our Hold rating as we see share price support from its decent dividend yield and cheap assets.
Key results highlights
4Q net profit decline 9% yoy to RM36m due to lower selling prices achieved for its palm products and weaker FFB production. On a qoq basis, 4Q net profit grew 53% due to higher FFB output and lower manuring costs. For the full year, net profit improved by 32% yoy due mainly to higher production and better selling prices achieved for its palm kernel products. The average PK selling price achieved was 28% higher at RM1,654 per tonne, while full-year FFB output grew 3% due to higher FFB yields. The group’s operating costs grew by only 5%, reflecting manageable replanting costs.
Key surprises
FFB output for the full year was 2% below our projection due to weaker 4Q yields from its estates. The average CPO price achieved of RM2,385 per tonne in 2014 was slightly ahead of MPOB’s average of RM2,383 per tonne as the group received premium pricing for some of its certified palm oil products. We noticed that the selling price discount between CPO for the Sabah region and Southern region of Malaysia has widened to RM60-70 per tonne over the past two months from RM10-20 per tonne a year ago. In view of this, we have lowered our CPO price assumptions for HSP as all of its estates are in Sabah, leading to a 3-7% cut in our net profit projections for FY15-16.
Supported by attractive dividends and assets
We continue to recommend that investors Hold the stock in view of its attractive dividend yields, strong net cash position and undervalued plantation assets. At the current share price, the implied EV/ha for its estates is only RM53,851, below the recent transacted price of RM70k-80k per ha for estates.
Source: CIMB Daybreak - 24 February 2015
http://cimbresearchklse.blogspot.com/2015/02/hap-seng-plantations-decent-4q-harvest.html
