First Resources set for growth in 2017

SINGAPORE (July 28): UOB is maintaining its “buy” call for Indonesia-based palm oil plantation First Resources (FR), with a target price of $2.00.

This comes as the research house cuts earnings forecasts for the plantation after adjusting down Fresh Fruit Bunches (FFB) production growth due to the severe dry weather. The research house expects FFB yield to recover in 2017, thus providing support for earnings.

In 2Q16, FFB production was 8.6% higher q-o-q, but still down 15.6% on a y-o-y basis. FFB nucleus production for 1H16 declined 15.9% on a y-o-y basis, standing at only 37.5% of UOB’s 2016 estimate. As such, the research house has revised down FFB production growth to -9.6% from -3.2%.

---

Related Stories

• Lim & Tan Securities maintains ‘buy’ on Grand Banks Yachts; almost doubles TP to $1.05
• Brokers’ Digest: AEM, Prime US REIT, Hyphens Pharma, Seatrium, Valuetronics, DFI Retail Group, CDG, Centurion, Sembcorp
• Citi maintains ‘buy’ on Keppel DC REIT after acquisition of two data centres in Genting Lane

---