F&N

F&N: Set to report 2Q12 results on May 11 after the mkt close. Deutsche expect core Net Profit of $154m implying an 8.7% increase YoY, and flat QoQ. Firm performance from FNN's breweries division and profit recognition from pre-sold domestic properties should underpin earnings growth. Key trends to be watching for from FNN's consumer division will be: a) Volume growth from FNN's soft drinks division b) Sustained growth in FNN's key brewery markets of Indo, Vietnam and SG, and c) Updates on operations at FNN's Rojana dairy plant in Thailand. For the ppty division, following firm take up at its Twin Waterfalls and Watertown projects in Punggol, FNN's land bank appears now appears relatively light. Co. now has less than 2m sqft in GFA (c. 1800 units) in inventory remaining. House will be watching for mgt's comments on capital deployment targets and geographies of interest at the results briefing. FNN has been an active bidder thus far this year, participating in four tenders this yr and has won one site at Bedok Av. 3. At a 21.5% discount to our RNAV of S$9.01, house continue to like FNN given its unique position as a beneficiary of rising Asean consumption and strong cash flows from recurrent earnings and pre-sold properties. Valuations of 15x FY12E P/E, 1.4x P/B are currently above long term averages of 13.4x P/E and 1.3xP/B. TP implies 8% upside.