First Resources

First Resources: UOB Kay Hian maintains Buy with $2.60 TP. House note that FR reported lower-than-expected FFB production growth in 1H13. However, based on historical trends, a strong 2H recovery could still result in the co meeting its target. For 1H13, nucleus FFB production was up by 0.6% yoy vs house full-year expectation of 12-13% y/y (vs management guidance of 10%). Based on historical trend, a strong recovery in 2H is possible, and this would result in FR being able to achieve our expectations. Back in 2010, 1H10 FFB production only accounted for about 39% of full-year production (1H13: 39%) and strong production in 2H10 contributed about 61% of 2010’s production. House have spoken with mgt, and they are keeping their guidance at this point in time. More updates will be available during the 2Q13 results briefing. Results are expected to be out on 13 Aug 13.