First Resources

First Resources: The latest FFB production figures for Oct showed 18.2% y-y blended growth, and, for 10M13, FFB production grew 3.8% y-y. Mgt said that Oct was FR’s peak production month and Nov and Dec’s FFB growth will be lower y-y, and at best, production will rise 5% y-y in 2013. FR will buy more third-party FFB to keep its mills running above 60% utilisation. For 2013, BNP lowers FFB growth to 3% y-y (from 10%) while in 2014, it now expects 13% y-y FFB growth (15%). Nevertheless the house keeps its TP of $2.76, based on 14.7x FY14e P/E. Maintains its Buy rating as FR still has an attractive oil palm age distribution – 69% of trees are in the maturity stage.