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Published: Monday April 16, 2012 MYT 9:17:00 AM
KUALA LUMPUR: CIMB Equities Research said Genting Plantations' US$116mil acquisition of 63.2% of a joint venture company with Indonesian estates as a good move.
The research house said on Monday this would boost its output growth and raise its planted area by 15% and enhance FY13-14 earnings per share (EPS) by 1%-3%.
CIMB Research said its sum-of-parts based target price was increased to RM9.35 as it raised the plantation price-to-earnins from 12.6 times to 14 times, in line with the big-cap players.
“We upgrade the stock from Underperform to Neutral as the stronger growth prospects help offset our concern over its rich valuations. We continue to prefer Sime Darby,” it said.
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