First Resources

First Resources: First Resources released its monthly statistics for Sep ‘14, which recorded higher CPO production of 67,149 tons (+12.4% y/y) and palm kernel production of 15,190 tons (+9.3% y/y). CPO extraction rate grew 0.1 ppt to 23.1%, while PK extraction rate slipped slightly to 5.2% from 5.3%. For 9M14, CPO production was 460,855 tons (+10.9%), while that for PK was 107,093 tons (+12%). Up to 1H14 results, the group recorded net profit of US$71.1m (-30% y/y) and revenue of US$290.1m (-1%), accounting for 39% and 44% of the street's full year estimates. Maybank-KE continues to like the stock for its longer term proposition, backed by plantation reserves of 100,000 ha (56% of existing planted area) and a young tree profile of eight years, which will sustain a FFB output CAGR of 12% over 2013-16. First Resources currently trades at 11.1x forward P/E versus its SGX-listed peers' average of 13.3x. Bloomberg consensus currently has 14 Buys, 3 Holds and 1 Sell for the counter, with an average 12-month TP of $2.47.