4Q FY2011 Results
Within expectations. TSH’s FY11 results were in line
with consensus and our estimates. 12-month revenues at
RM1.148b made up of 96% of our full year target and PBT
of RM162.4m almost made up of our full year estimate.
For the full year under review, revenues grew 26% while
operating profit rose 46% to RM166.9m. EPS of 14.7sen
was lower than its previous year of 20.6sen on an
enlarged share capital after its 1:1 bonus issue. Overall,
higher earnings were attributable to higher CPO prices
and better FFB production on improved yield management
as well as higher mature acreages in Indonesia. During
the year, FFB production increased by 43% to 399,604MT.
The Wood products division continue to register a loss on
sluggish demand from US and Europe. The Cocoamanufacturing
division reported lower profits on lower
production and unfavourable cocoa butter prices.
On a QoQ basis, despite 7% higher revenues of
RM292.9m, the bottomline was lower than in 3Q on the
lower CPO prices following the trend in FFB production
cycle. PBT fell 36% to RM30.1m and net profits of
RM26.1m was 24% lower than last quarter’s RM34.5m.
The lower PBT was also due to provision of doubtful debts
in the wood products division.
Recommendation
We continue to view TSH with favour, as it can bank on
improvements in efficiency in plantation division and
higher crop production from its Indonesia estates. We are
introducing our 2013 projections. We applied a two-stage
DDM valuation model for TSH, as we expect high growth
in the coming years when more palms come into maturity
in Indonesia. We have tweaked our target price upwards
to RM2.88. BUY recommendation maintained.
Source:Jupiter Securities Research 24 Feb 2012
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