First Resources: Although First Resources' 1Q15 core net profit accounted for only 16% of both CIMB's and consensus’s full-year forecasts, house deem the results as in line due to stronger projected earnings in future quarters.
1Q is typically the lowest producing quarter for its estates. On top of this, the 1Q earnings were impacted by a net inventory build-up of 20,000 tonnes. Downstream earnings were also weak due to a lower sales volumes.
CIMB maintains its earnings forecasts and TP of $2.32, which is based on 12.3x FY16 P/E. Its Add rating is also intact due to its favourable estate age profile, attractive valuations and hands-on management.
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