Friday, November 12, 2010

First Resources

First Resources: 3Q10 revenue at US$88.2m, +43% yoy, +47% qoq. Net profit at US$36.9m, +40% yoy, up 3-fold qoq, driven by higher selling prices of CPO, palm kernel, and continued cost mgt.
Nucleus FFB production saw strong recovery in 3Q10, which more than offset the decline booked in 1H2010 due to tree stress. Plasma FFB production also started to recover. 9M10 CPO pdtn was 260.6k tons, flat yoy...

Looking forward, mgt expects pdtn volume will continue to be seasonally higher in 4Q and that palm oil prices will remain well supported. Fractionation plant to be ready by early 2011 which will extend the Group’s product offering to include Olein and Stearin. The 9th palm oil mill is expected to be completed by 1H11, while invmts in the 10th and 11th palm oil mills to begin in early 2011…

First Resources trades at 15.6 consensus fwd P/E, lower vs peers Wilmar 20.5x, Golden Agri 19.1x, IndoAgri 23.4x.
Pre-results, stock saw a number of rating upgrades to Buy, Outperform. Recent targets range $1.58-1.70.

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