First Resources

First Resources: DBS Vickers cuts to Hold from Buy, citing the stock has outperformed the STI and CPO prices by 23% and 45% ytd. House notes that while FR's long term prospects remain robust with 3-year earnings CAGR of 19.7%, this has been priced in. It keeps a $2.15 target and suggests locking in gains now. Highlights 2Q12 CPO output rose 5% qoq, slightly ahead of expectations, but CPO price averaged US$828/MT, -7% qoq. It expects 2Q12 earnings to come in ~US$41-46m or down 5-16% qoq. Tips 2H12 output should remain normal as FR did not experience any adverse effects from 1H10's El Nino. DBSV also expects FR to continue to benefit from strong 2Q12 spot refining margins and raises FY12-14 earnings by around 1% after adjusting 2011-14 CPO output CAGR to 8.3%. The stock is down 0.3% to $1.995.