Mewah

Mewah: Weak set of results which was in-line. 4Q12 rev at US$767.8m, -24% yoy and -9% qoq, while core net profit at US$4.2m, -61% yoy and +262% qoq. Result brings FY12 rev to US$3.6b, -19% and core net profit to US$40.2m, -50%. For the full yr sales vol decreased by 6.8% to 3.4m MT. Operating margin was relatively flat at US$31.8/mt. Rev fell on back of both lower sales vols and lower ASP. However, grp note that as CPO prices bottomed out during the qtr, the Co has witnessed some revival in which helped it achieve better sales vol and margins for the Consumer Pack segment. However, high inventory levels in Msia and Indonesia has kept the margins under pressure, particularly for Masian refiners due to export duty disadvantage vs Indonesian peers. Under tough operating conditions for Msian refiners, the Group experienced marginal drop in vol and reduced margins for its Bulk segment. Going forward, grp remains cautious on its near-term outlook. However, believes that current global conditions and challenging industry conditions will help industry consolidate and benefit stronger players in the longer term. The co has decided to put the plans to invest in an Indo refinery on hold and cite that it is just a matter of prioritisation and timing before it revisits whether to invest in a refinery in Indo. Meanwhile, Grp continues to tread cautiously in its operations while focusing on increasing refining capacity in Malaysia and participating in other non-oil consumer products. Ratings as follow. CIMB maintains U/[ with $0.46 TP Nomura maintains Neutral with $0.45 TP