BIMB SECURITIES RESEARCH

MARKET INSIGHT
PP16795/03/2012(029624)

Tuesday, 28 February, 2012

Result Review

Genting Plantations
Below
Stock Data
Bloomberg Ticker GENP MK Market Cap (RM'mn) 7,019 Issued shares (mn) 759 52-week high 9.70 52-week low 6.55 3-mth avg daily volume ('00) 6,933 Free Float 30.93 Shariah Compliant Y Altman Z-score 6.43 YTD price chg 7.56 YTD KLCI chg 1.85 Beta 0.90 Major Shareholders Genting Bhd 53.39% EPF 14.11% CIMB-Principal AM 1.30% 1mth (2.63) (5.01) 2011 1,372.4 1,336.5 577.4 601.3 442.0 58.25 16.25 1.76 4.02 15.88 43.20% 44.99% 26.38% 14.23% 11.59% N. Cash 2012E 1,411.5 1,187.5 514.0 539.7 400.7 52.81 16.00 1.73 4.38 17.52 43.28% 45.45% 25.00% 11.88% 9.37% N. Cash 3mth 15.19 5.77 2013E 1,501.5 1,247.4 546.7 574.5 426.5 56.21 17.00 1.84 4.78 16.46 43.83% 46.05% 25.00% 11.65% 9.15% N. Cash 5.04% 6.37% 6.44% 6.44% 12mth 18.78 11.88 2014E 1,593.7 1,339.0 576.5 610.7 453.4 59.75 18.00 1.95 5.19 15.48 43.05% 45.61% 25.00% 11.42% 8.88% N. Cash 7.34% 5.45% 6.30% 6.30%

Neutral
Price: RM9.25 Target Price: (-6.4%)RM8.66
Genting Plantations registered a record profit for FY11, thanks to the 14% growth in FFB production and higher average palm products prices achieved for the year. Nonetheless, despite the higher revenue in 4QFY11, profitability fell due to lower average selling prices (vs. 4QFY10 and 3QFY11) and higher operating expenditure subsequent to the wage incentive revision. Therefore we have revised downward our FY12 earnings estimates by approximately 2%. Maintain NEUTRAL at lower target price of RM8.66 (from RM8.78 previously). Revenue boosted by higher FFB production. In 4QFY11, Genting Plantations recorded revenue of RM356.5m, a 20.1% increase y-o-y and 3.5% increase q-o-q, thanks to better yield from the Sabah estates. For the quarter under review, the Group harvested 366.4k metric tonnes of FFB, 18.0% higher than 4QFY10. Lower income. Despite the better sales, the Groups pretax profit fell 8.5% y-o-y and 15.3% q-o-q due to lower palm products selling prices and higher operating expenditure in Malaysia subsequent to the revision in wage incentives. The average CPO selling prices achieved in 4QFY11 was RM2,973/mt, 6.7% lower than the average price of RM3,188/mt achieved in 4QFY10. While, the palm kernel price plunged approximately 27.2% to RM1,697/mt from RM2,332/mt previously. Promising full year result. Though with a less favourable quarter result, the Group posted RM601.3 pre-tax profit for FY11, a 36.7% increase as compared to RM439.7m in FY10. Average CPO and palm kernel price achieved in FY11 was RM3,240/mt (+18%) and RM2,235/mt (+27%) respectively. Additionally, the FFB production increased 14.6% to 1.37m metric tonnes. 12sen dividend. The Board has declared a special dividend of 6.25sen less 25%. The ex-date for the special dividend is on 9 March 2012 and payable on 27 March 2011. In addition to the special dividend, the Board has proposed a final dividend of 5.75sen less 25%, which is subject to shareholders approval at the forthcoming AGM View & Valuation. Though with better than expected sales performance, the Groups earnings fell short of expectation. Hence, we have revised downward our FY12 earnings estimates by approximately 2%. By applying a 3year average P/E ratio of 16.4x on the revised 12 months EPS forecast of 52.8 sen, we maintain NEUTRAL on Genting Plantations with lower target price of RM8.66.

A Record Year

Share Performance (%)

Absolute vs. KLCI

Financial Highlights
FYE 31 Dec FFB Prod. ('000 mt) Turnover EBIT Pretax profit Net Profit EPS (sen) Gross DPS (sen) Div Yield (%) NTA/share (RM) PE Ratio EBIT Margin Pretax Margin Effective tax rate ROE ROA Net Gearing (x) 2010 1,197.7 988.6 424.7 439.7 324.2 42.76 12.50 1.35 3.53 21.63 42.96% 44.48% 26.27% 11.59% 10.15% N. Cash 30.84% 45.66% 45.64% 37.57%

Growth Ratios
Turnover EBIT Pretax profit Net profit 35.19% -11.15% 35.97% -10.99% 36.75% -10.25% 36.34% -9.34%

Share Price Chart

9.9 9.4 8.9 8.4 7.9 7.4 6.9 6.4 Mar-11 May-11 Dec-11 Sep-11 Jan-12 Nov-11 Aug-11 Feb-12 Apr-11 Jul-11 Oct-11 Jun-11

Ng Keat Yung nkyung@bimbsec.com.my 03-26918887 ext 181

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28 February 2012

Results Review: Genting Plantations 4QFY11

Dec-10 296.7 139.7 139.5 -36.2 -0.5 102.8 13.54 N. Cash 47.07 47.03 34.64 25.97 Mar-11 271.1 132.3 132.1 -37.3 -0.5 94.3 12.43 N. Cash 48.80 48.72 34.79 28.22 Jun-11 364.4 191.0 190.9 -49.8 -1.2 139.9 18.44 N. Cash 52.41 52.40 38.39 26.09 Sep-11 344.5 151.5 150.7 -37.5 0.5 113.8 14.99 N. Cash 43.98 43.75 33.02 24.86 Dec-11 QoQ Chg 356.5 3.5 128.6 -15.1 127.6 -15.3 -34.1 -9.0 0.5 5.1 94.0 -17.3 12.39 -17.3 N. Cash N/A 36.07 -18.0 35.80 -18.2 26.38 -20.1 26.72 7.5 YoY Chg 12MFY10 12MFY11 20.1 988.6 1,336.5 -7.9 439.9 603.4 -8.5 439.7 601.3 -5.9 -115.5 -158.7 -203.1 0.0 -0.6 -8.5 324.2 442.0 -8.5 42.7 58.3 N/A N. Cash N. Cash -23.4 44.49 45.15 -23.9 44.48 44.99 -23.8 32.80 33.07 2.9 26.27 26.38 YTD 35.2 Chg 37.2 36.7 37.3 NM 36.3 36.3 N/A 1.5 1.2 0.9 0.4

Quarterly figures
FYE 31 Dec (RM'm) Revenue EBIT Pretax profit Taxation Minority interest Net Profit EPS (sen) Net gearing (x) EBIT margin (%) PBT margin (%) Net margin (%) Effective tax rate (%)

Source: BIMB Securities

Income Statement
FYE 31 Dec (RM'm) Revenue EBITDA Pretax profit Tax MI Net profit Net profit growth (%) EPS (sen) EPS growth (%) Gross DPS (sen) Dividend yield (%) NTA/share (RM) Net gearing (x) PER (x) P / NTA (x) ROE (%) ROA (%) 2009 755.6 305.2 301.9 (64.0) (2.3) 235.7 -36.9 31.1 -36.9 9.0 0.97 2.78 N. Cash 29.72 3.33 9.44 8.68 2010 988.6 448.6 439.7 (115.5) 0.0 324.2 37.6 42.8 37.4 12.5 1.35 3.53 N. Cash 21.63 2.62 11.59 10.15 2011 1,336.5 641.3 601.3 (158.7) (0.6) 442.0 36.3 58.3 36.2 16.3 1.76 4.02 N. Cash 15.88 2.30 14.22 11.59 2012E 1,187.5 543.1 539.7 (134.9) (4.0) 400.7 -9.3 52.8 -9.3 16.0 1.73 4.39 N. Cash 17.52 2.11 11.86 9.37 2013E 1,247.4 580.2 574.5 (143.6) (4.3) 426.5 6.4 56.2 6.4 17.0 1.84 4.78 N. Cash 16.46 1.93 11.63 9.15 2014E 1,339.0 614.2 610.7 (152.7) (4.6) 453.4 6.3 59.8 6.3 18.0 1.95 5.20 N. Cash 15.48 1.78 11.41 8.88

Source: BIMB Securities

Balance Sheet
FYE 31 Dec (RM'm) Current assets Non-current assets Total Assets Current liabilities Non-current liabilities Shareholders' fund Minority interest Equity & liabilities 2009 889.1 1,978.4 2,867.6 133.3 119.1 2,548.1 67.1 2,867.6 2010 1,108.8 2,413.1 3,522.0 201.5 340.9 2,868.7 110.9 3,522.0 2011 1,406.9 2,699.0 4,105.9 231.0 523.0 3,116.6 117.6 4,105.9 2012E 1,600.9 2,847.0 4,448.0 233.8 580.1 3,513.6 120.5 4,448.0 2013E 1,877.0 2,997.4 4,874.4 223.5 716.3 3,811.1 123.5 4,874.4 2014E 2,185.5 3,150.0 5,335.5 231.8 849.1 4,127.9 126.7 5,335.5

Source: BIMB Securities

www.bimbsec.com.my

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28 February 2012
DEFINITION OF RATINGS BIMB Securities uses the following rating system:

Results Review: Genting Plantations 4QFY11

STOCK RECOMMENDATION BUY Total return (price appreciation plus dividend yield) is expected to exceed 10% in the next 12 months OUTPERFORM The stock is expected to perform ahead of the market in the next 12 months TRADING BUY The stock is expected to outperform the market in the next 3 months NEUTRAL The stock is expected to perform in line with the market in the next 12 months TRADING SELL The stock is expected to underperform the market in the next 3 months SELL An expected price depreciation of more than 10% in the next 12 months SECTOR RECOMMENDATION OVERWEIGHT The Industry as defined by the analysts coverage universe, is expected to outperform the relevant primary market index over the next 12 months NEUTRAL The Industry as defined by the analysts coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months UNDERWEIGHT The Industry as defined by the analysts coverage universe, is expected to underperform the relevant primary market index over the next 12 months Applicability of ratings The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies. Disclaimer The investments discussed or recommended in this report not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of BIMB Securities SdnBhd may from time to time have a position in or either the securities mentioned herein. Members of the BIMB Group and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgements as of this and are subject to change without notice. BIMB Securities SdnBhd accepts no liability for any direct, indirect or consequential loss arising from use of this report.

Published by

BIMB SECURITIES SDN BHD (290163-X) A Participating Organisation of Bursa Malaysia Securities Berhad Level 32, Menara Multi Purpose, Capital Square, No. 8 Jalan Munshi Abdullah, 50100 Kuala Lumpur Tel: 03-2691 8887, Fax: 03-2691 1262 http://www.bimbsec.com.my

Kenny Yee Head of Research

www.bimbsec.com.my

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