It said on Monday that based on the companies it covered and based on the 2Q17 results, it has Buy ratings on Genting Plantation and Ta Ann.
It has Hold ratings for KL Kepong, Felda Global, Sime Darby, IJM Plantation, Hap Seng Plantation and Jaya Tiasa. However, it has a Sell on IOI Corp and WTK. For plantation-sector exposure, Genting Plantations is its top sector pick.
“The 2Q17 plantation sector revenue was stronger on-year driven by higher fresh fruit bunches (FFB) and crude palm oil (CPO) production as well as stronger CPO prices.
“However, core net earnings for the plantation sector were weaker on-year, mainly due to higher cost of production,” it said.
Affin Hwang Research said that results for KLK, FGV, IJM Plantations, IOI Corp, Genting Plantations, Jaya Tiasa and WTK were below its expectations; Hap Seng Plantation and Ta Ann were within, while Sime came in above expectations.
“We recently lowered our 2017-18E sector earnings by 4%-8% after taking into account the 2Q17 results. We also downgraded our ratings on KLK, IOI Corp, IJM Plantations, Jaya Tiasa and WTK. We maintain our Neutral sector rating with Genting Plantations as our top pick,” it said.