First Resources

First Resources (FR): Relatively better positioned among peers to ride through the headwinds and deliver decent profits. FR’s strength lies in its balanced age profile that ensures good production growth and cash flow. This, together with prudent cost control and flexible downstream operations, makes FR one of the most profitable plantation companies. Share price corrected 30% from its 52-week high of $2.60 on the back of CPO price weakness and relatively weaker 1H14 earnings vs peers’. The price correction makes FR one of the cheapest high-growth plantation stocks, at 1-year forward PE of 12x vs peers’ 11-14x. UOB Kay Hian maintains BUY with TP of $2.80.