Mewah

Mewah: In-line with recent plans to expand in Indo, Co. has purchased two plots of land in Indonesia for 19.6b rupiah ($2.8m) that will be used for future expansion purposes. Co. will fund the acquisitions using available IPO proceeds and/or retained earnings.

We note that while move should be welcomed by the mkt, on back that Indo refining margins have increased substantially post the revision of the tax structure which prioritize downstream manufacturing over CPO exports, earnings from the refinery are estimated to only come in from FY14F onwards.

Given fact that Co. will also delay completion of its Sabah refinery (originally scheduled in 2H12F), there might be a small downside risk to FY12F earnings estimate. Also, the delaying of Sabah, Zhangjiagang and Tianjin projects may somewhat offset the additional earnings contribution from Indo refinery project.

While there could still be positive momentum in the short-term, we note that fundamentally counter is still featured as one of the Top Sell counter for 2012 by various houses, with a mean TP of $0.41.