PETALING JAYA: Sarawak Plantation Bhd
’s near-term outlook remains supported by the planter’s steady replanting progress, says BIMB Research.
Sarawak Plantation, which replanted about 2,300ha in the first nine months of this year, has an expanding mature profile, with 1,100ha that reached maturity in July and another 900ha scheduled next year that should enhance internal crop availability.
In addition, its peak output shifted to October following early rainfall this year, but fruit quality and the oil extraction rate are improving into the year-end.
BIMB Research maintained a conservative fresh fruit bunch growth forecast of 4% year-on-year (y-o-y) for this year versus management’s estimated 357,000 tonnes or up 6% y-o-y, while next year is forecast to see an increase of 10% y-o-y compared with management’s forecast of over 20% y-o-y.
The research house also expects stronger output growth next year to be primarily driven by full-year contribution from newly mature areas.
BIMB Research also expects crude palm oil prices next year to remain favourable at RM4,200 per tonne, supporting earnings resilience.
The research house, which has a “hold” call on the stock, has pegged a higher target price of RM3.03 a share on the planter from RM2.83 previously. It said Sarawak Plantation’s share price has risen by about 30% year to date.
